Concordia Healthcare Corp. T.CXR.R

New Bloom Burton analyst report

[foxhunter10]

Summary of the bloom burton analyst report on CXR that just came out:

"Preliminary 2016 Guidance.
Yesterday, Concordia announced its preliminary guidance for 2016, which we view as mixed. The guided ranges for revenues and EBITDA were ahead of Bloom Burton forecasts and consensus, however, guidance for adjusted EPS was below our forecast and consensus. We have made adjustments to our model based on the guidance (changes highlighted in the accompanying table - middle, left). As a result of the changes, we are reducing our 12-month target price for CXRX stock to US$73.00 from $78.00, however, we are maintaining our recently upped rating of BUY (Above Average risk) due to the 130% implied return to our target price. We believe the recent sharp CXRX stock sell-off was overdone, creating an opportunity in which the inherent cash flow and earnings value of Concordia’s current assets is substantially higher than the current trading range of the stock. Additionally, the company has access to an undrawn $200 MM revolving credit facility, which could support additional tuck-in acquisitions.

Risks include the substantial debt taken on by Concordia to finance the recently closed acquisition of AMCo (net debt is approximately $3.5 B). However, with expected annual cash EBITDA in excess of $600 MM, and AMCo anticipated to drive high single digit growth of the combined company, we believe Concordia’s debt is manageable barring a major setback.

Uproar around drug pricing may ultimately lead to regulation, but we do not believe this will happen in the near-term. Additionally, while drug pricing noise may impact M&A opportunity and drug pricing strategy of companies such as Concordia going forward, our model for CXRX does not forecast large price increases, nor does it include further acquisition.

We like the AMCo business. With the acquisition, Concordia’s product portfolio will broaden from 24 products sold in the U.S. market, to more than 190 products sold in more than 100 countries. Concordia will also gain new product development capabilities, and a pipeline of 60 expected launches over the next 3 years to fuel organic growth of the combined organization."

My opinion it looks good and strong! Not sure why there is still so much nervousness in the market. I think once time passes and next earnings come out (Nov 4th I believe) the confidence will be back and we will be back on an upward trend.

[visionaryfool]

THX for sharing.

[TheRock07]

Thank you for that report whose target is close to $95 per share. This specialized shorting of Canadian listed pharmas is now at an end. Onwards and upwards to $100 +

[healthstock1234]

Yes, I think it is. All was around Valeant,2 questions: business model and fraud. It is almost sure that there is not fraud there, and the business model is legal. If they want to frame the game , they will change the law and Valeant will adapt the business. They have nothing else so material on Valeant to keep all health industry down.

[donaldspice]

The 2016 guidance was a good starting point but I am not sure why so many people were disappointed. The company had to set their sights at a reasonable level otherwise if they miss on any quarters the stock will get skewered. Most people wanted them to promise the moon yesterday in order to make a quick buck but those same people would be complaining 6 months later when the stock drops on an EPS

[humbledude]

Well said. Over expectation comes BIG disappointment. at least the company is not promising BS.