Top analyst Irina Rivkind Koffler at Mizuho is all the more bullish on Endo International plc – Ordinary Shares (NASDAQ:ENDP) following the subdued risk factor after the firm’s fourth-quarter earnings and guidance release this past Tuesday. In reaction, the analyst reiterates a Buy rating on ENDP while lifting the price target from $15 to $17, which represents a 38% increase from where the shares last closed.
Koffler explains her surge in confidence, underscoring, “We raise our PT to $17 because we view the stock as increasingly derisked post-2017 guidance. We continue to like the optionality associated with potential asset sales […]”
“We still like ENDP and its significant optionality, and we see upside to the stock for the following reasons: (1) Endo can likely sell Xiaflex for a healthy multiple with minimal EBITDA downside after cutting $30M in R&D expense for the planned cellulite trial and expenses tied to ~100 reps. (2) Endo may beat expectations following its conservative guide and/or longer than expected persistence of the Somar business, which is now also for sale. (3) Its high gross margin (55%) generic business with an attractive 117 ANDA pipeline, with 35 “first to files”, is likely to attract consolidators in our view. (4) Its U.S.-based manufacturing plants contributed 95% of its production based on revenue, which may appeal to a potential buyer in the current political environment,” Koffler surmises.
For the fourth quarter, ENDP yielded a robust beat with $1.24 billion in revenue and $1.77 in non-GAAP EPS, compared to FactSet consensus of $1.16 billion in revenue and $1.63 in non-GAAP EPS. Endo management set guidance for the financial year of 2017 between $3.45 and $3.60 billion in revenue and between $3.45 and $3.75 in non-GAAP EPS, ahead of consensus expectations for revenue of $3.62 billion and $3.81 in non-GAAP EPS. Though the analyst is “more conservative” on outlook in 2017, she nonetheless sees a more favorable risk/reward opportunity.
Irina Rivkind Koffler has a very good TipRanks score with a high ranking of #68 out of 4,513 analysts and a 56% success rate. Koffler gains 21.4% in her yearly returns. However, when recommending ENDP, Koffler loses 12.3% in average profits on the stock.
TipRanks analytics exhibit ENDP as a Hold. Based on 10 analysts polled by TipRanks in the last 3 months, 2 rate a Buy on ENDP while 8 maintain a Hold. The 12-month average price target stands at $18.13, marking a nearly 48% upside from where the stock is currently trading.
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