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Goldman Removes Mylan From Its Conviction List

Mylan Inc. NASDAQ:MYL, Allergan, Inc. NYSE:AGN - Goldman Removes Mylan From Its Conviction List

Mylan NV MYL 0.1% shares have declined 28 percent since mid-December 2015, as compared to the 1 percent appreciation in the S&P 500.

Goldman Sachs’ Jami Rubin maintains a Buy rating and price target of $60 on the company, while removing it from the "Americas Conviction List."

Generic Concerns

“We continue to believe that Mylan’s attractive valuation, globally diversified platform, and favorable business mix offers significant upside, however we acknowledge that the cloud over generic drug pricing may persist longer than we expected,” Rubin mentioned.

Related Link: Allergan Is Primed For Growth, Goldman Sees 27% Upside Potential

Although Mylan reported in-line results, the analyst pointed out that concerns regarding generic drug pricing continue and are likely to have been raised by the weak 1Q16 results reported by Allergan plc Ordinary Shares AGN 2.26%.

According to the Goldman Sachs report, “With greater scrutiny surrounding generic pricing dynamics in recent months, we believe the market requires greater transparency from generic manufacturers before confidence in what we believe to be a solid business model returns.”

Rubin also pointed out that Mylan’s generic portfolio is not at risk of targeted pricing pressure, and neither is there any evidence of it having benefited from significant price increases in the past.

The analyst believes that even in a situation where broad-based generic pricing pressure affect the company, the international exposure of Mylan’s generic platform and the company’s diversified business mix would protect the operating profit from any meaningful impact.

DateFirmActionFromTo
May 2016Leerink SwannMaintainsOutperform
Feb 2016Argus ResearchMaintainsBuy
Feb 2016Wells FargoInitiates Coverage onMarket Perform

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