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Jazz Pharmaceuticals Remains On Goldman's Buy List

Jazz Pharmaceuticals plc - Ordinary Shares JAZZ 5.79% reported its Q2 results, with the revenue beating the estimate and the consensus and the EPS ahead of the consensus expectations. Goldman Sachs’ Stephan Stewart reiterated a Buy rating on the company, while lowering the price target from $196 to $195.

The company reported its Q2 revenue at $381 million, driven by slightly better Xyrem sales and a higher Defitelio upside.

Top line performance led to apples to apples EPS of $2.82, in line with the estimate but ahead of the consensus.

Guidance

Steward mentioned that “as expected, JAZZ officially updated its 2016 guidance to reflect dilution from the recently closed Celator acquisition.”

The modified calculation of non-GAAP taxes according to SEC regulations led to a reduction in the reported EPS for 2Q16 and the 2016 guidance.

The full year EPS guidance was lowered from $11.10-$11.50 to $9.90-$10.30, mostly consistent with the sales outlook for key drugs.

Jazz Pharma maintained its full year Xyrem sales guidance.

Catalysts

“Durability of Xyrem remains the biggest focus for the stock and we continue to see potential for settlements with generic filers in the next couple of quarters – catalysts for shares,” Stewart stated.

The analyst reaffirmed expectations for generic competition for year-end 2024, following the recent IP decisions.

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DateFirmActionFromTo
Jun 2016BMO CapitalInitiates Coverage onOutperform
Jun 2016Goldman SachsInitiates Coverage onBuy
Jun 2016SunTrust Robinson HumphreyMaintainsBuy

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