Paradigm slashed target from $4.25 to $1.75 In a research update to clients today, Sarugaser maintained his “Buy” rating, but cut his one-year price target on the stock from $4.25 to $1.75, implying a return of 91 per cent at the time of publication. The analyst explained the reasoning behind the decision.
“Due to the significant unanticipated delay in plasminogen approval, we have revised our valuation of PLI,” he commented. “In summary, we have scaled back our assumptions driving plasminogen’s value, providing an NPV of $565M. Similarly, we calculate an NPV for IVIG at $163M, 4050 for IPF at $568M, and 4050 for Alstrom at $10M. The sum of parts provides a total value for PLI of $1.3B. We further calculated a conservative equity raise of $50M at $0.90/sh, resulting in a full share count of 763M, thus deriving a per-share value of $1.74 (which we round to $1.75).”
Sarugaser thinks ProMetic will generate EBITDA of negative $109.9-million on revenue of $31.5-million in fiscal 2018.