Endo (ENDP) Earnings: Here’s Why This Analyst Remains Sidelined

However, Canaccord analyst Dewey Steadman remains sidelined on ENDP with a Neutral rating and a price target of $7.00, arguing that there’s still significant overhang from debt, legal liabilities and a likely drawn-out opioid resolution. (To watch Steadman’s track record, click here)

To the company’s credit, the analyst is encouraged to see signs of generic market stabilization, though he thinks smart portfolio management is a likely driver over macro improvements. Steadman also believes there’s diamonds in the rough with the Endo story as injectables and core brands continue to shine.

“The acquisition of Somerset Therapeutics more than doubles Endo’s existing footprint in injectables, strengthening their strategic focus on their Sterile Injectables segment. With this acquisition comes a portfolio of eight commercial high-value products that will expand their reach into the hospital setting, and a pipeline of over 40 products along with the production and development capabilities that will augment the existing Rochester facility. In additional, both Adrenalin and Vasostrict performed well in the quarter. Adrenalin with $30 mm in sales benefited from an easier comp as unapproved sources began vacating the marketplace in 2Q/17 while Vasostrict, with sales of $114 mm (15% y/y growth), benefited from customer buying patterns, and is expected to moderate in 2Q/18 and remain balanced through the rest of the year,” Steadman noted.

Wall Street believes Steadman is smart to play it safe when it comes to the generic drug giant’s prospects ahead, as TipRanks analytics reveal ENDP as a Hold. Out of 12 analysts polled in the last 3 months, only one is bullish on Endo stock, while 11 remain sidelined. 

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