Mizuho Weighs in on Endo International plc – Ordinary Shares (ENDP) Following Analyst Event

Endo International plc – Ordinary Shares (NASDAQ:ENDP) recently held an analyst event where management hosted a sell-side meeting at its Par facility, which included a plant tour. In light of takeaways from the visit, Mizuho top analyst Irina Rivkind Koffler reiterates a Buy rating on shares of ENDP with a $29 price target, which represents a 38% increase from where the stock is currently trading.

First, Koffler notes ENDP continues to evaluate the best way to enhance the business and once management decides on an ideal approach, the company will decide which optimal capital structure it needs. According to ENDP CEO Paul Campanelli, a business update should be forthcoming in February following the firm’s Board meeting.

Second, Koffler believes, “Mgmt plans to eliminate redundant functions, consolidate its CT patch facility, and further streamline the business, which we view favorably.”

Third, management does not consider its opioid business a growth driver anymore. Furthermore, Koffler adds, “We would not be surprised if Endo stopped promoting its pain drugs altogether and even exited its Belbuca partnership (since it referred to the product as disappointing and would not commit to earlier forecasts).”

Fourth, Koffler anticipates an imminent launch for Seroquel and Zetia generics.

Fifth, the analyst notes management finds a large component of its remaining 8000 mesh liability cases to be “low value or potentially fraudulent.”

Sixth, ENDP does not plan to divest Xiaflex. Koffler believes ENDP can divest assets with the objective of de-levering “and then itself get consolidated, remains unchanged.”

“We believe multiple expansion is warranted if Endo can deliver a strong 3Q:16 earnings report and an on-time launch of Seroquel generics on November 1, which we see as the next catalysts for ENDP,” Koffler concludes.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Irina Rivkind Koffler has achieved a high ranking of #48 out of 4,181 analysts. Koffler upholds a 54% success rate and gains 21.1% in her annual returns. However, when recommending ENDP, Koffler loses 1.3% in average profits on the stock.

TipRanks analytics indicate ENDP as a Buy. Based on 9 analysts polled in the last 3 months, 4 rate a Buy on ENDP, while 5 maintain a Hold. The 12-month price target stands at $26.00, marking a 23% upside from where the shares last closed.

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