RE:RBC investment Thesis..even low target is higer then SPNot going to be pretty when they factor in increased debt, increased interest payments and hopefully reduce the multiple. The haven't updated target prices to reflect the note issue. Stay tuned! Lol
fundtrader wrote: Target price/base case Our $14 price target is based on the average of our EV/EBITDA valuation and DCF analysis. Applying a 7.3x multiple to our 2017 Adj. EBITDA forecast of ~$499MM generates a value of $12.04. Our DCF value (11.0% WACC and a -2% terminal growth rate) equates to $15.74. The average of our EV/EBITDA and DCF values is $13.89, hence our $14 price target. There are no further acquisitions included in our base case. We assume that Photofrin is approved for bile duct cancer in 2018.
Upside scenario Our $27 upside scenario utilizes a 8.0x multiple on 2017E Adj. EBITDA of $550MM, equating to a value of $26.38. Our DCF value equates to $27.12. The average of our EV/EBITDA and DCF values is $26.75, rounded to our $27 upside value. This scenario utilizes a 1% terminal growth rate and higher multiple plus incrementally higher EBITDA to reflect stronger organic growth. We also assume that Photofrin is approved for bile duct cancer in 2018.
Downside scenario Our $4 downside scenario utilizes a 7.0x multiple on 2017E Adj. EBITDA of $460MM, generating a value of $3.82. This scenario assumes no new approvals for Photofrin and lowerthan-anticipated demand for the portfolio. We also assume increased AMCo competition and lower Donnatal demand.