Endo International plc (ENDP) Long-Term Strategy Remains Unclear


Canaccord analyst Dewey Steadman is out with a research note on shares of Endo International plc (NASDAQ:ENDP), after the drug giant reported first quarter preliminary revenue of between $1.015 and $1.035 billion, compared to the analyst’s $1.012 billion estimate and consensus of $1.2 billion. Preliminary 1Q/17 EBITDA is expected to be between $440 and $460 million compared to Steadman’s $431 million estimate and consensus of $422 million.

Steadman commented, “Endo’s 1Q/17 pre-announce is ahead of our estimates and roughly in line with consensus, which bodes well for a quarter many investors thought Endo may miss. Mixed in the pre-announce were two impairments that are of little concern to us and a potential Somar impairment if the asset is sold.”

The “pre-announce comes on the heels of the company potentially pushing out its term loan facility maturity to 2024 which should enhance near-term flexibility in debt management, M&A, and cash outflow from pending mesh settlements. That said, given low visibility on Endo’s long-term strategy for growth in both brands and generics, we remain on the sidelines,” the analyst added.

As such, Steadman reiterates a Hold rating on Endo shares, with a price target of $14.00, which implies an upside of 31% from current levels.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dewey Steadman has a yearly average return of -3.9% and a 32% success rate. Steadman is ranked #3763 out of 4560 analysts.

Out of the 8 analysts polled (in the past 3 months), 7 rate Endo stock a Hold, while only one rates the stock a Buy. With a return potential of 44%, the stock’s consensus target price stands at $15.50.

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