Endo International PLC ENDP 7.9% is now trading at a favorable risk-reward profile and investors should be constructive on the stock, according to Citi.
The Analyst
Citi’s Liav Abraham upgraded Endo International from Neutral to Buy with a price target lifted from $7 to $11.
The Thesis
Endo is an attractive stock, despite a recent rally, Abraham said in the upgrade note. (See the analyst’s track record here.)
Abraham named the following as drivers of Citi’s newly bullish stance:
- The company’s base business is underappreciated by the Street and should drive upside to estimates from its status as the exclusive distributor of Somerset’s glycopyrrolate injection, which should see accelerated growth.
- Delays in competitors like hydrocodone APAP that were expected to enter the market in the first half of 2018.
- Execution on new launches of potential durable commercial assets.
- Better-than-expected benefits from the acquisition of the Somerset business.
Endo’s CCH cellulite opportunity represents the company’s “next big opportunity” for three reasons, the analyst said:
- The company is targeting a significant unmet need in a widespread condition.
- Recent clinical data from Phase 2b trials of CCH in cellulite were “compelling.”
- A growing demand among patients who want non-invasive, injectable aesthetic procedures.
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