Allergan plc (AGN) REPORT by Gabelli Analyst Kevin Kedra (1-26-2018)

Allergan plc (AGN) REPORT by Gabelli Analyst Kevin Kedra (1-26-2018)

For the full report click here: http://www.gabelli.com/Gab_pdf/Research/Reports/AGN_20171130.pdf

Allergan plc (AGN) REPORT by Gabelli Analyst Kevin Kedra (1-26-2018)

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Transcript:
Allergan, headquartered in Dublin, Ireland, a pharmaceutical company best known for their aesthetics portfolio led by Botox. The company also sells medicines to treat ophthalmology, neurology, and gastrointestinal disorders.

The company has 333 million shares outstanding, closed at 178 dollars per share for an equity market cap of 63 billion dollars.

Allergan is a leader in the $11.3 billion self-pay medical aesthetics market. Products like Botox, Juvederm fillers, and CoolSculpting fat reduction generated $5.6 billion of aesthetics revenue in 2017, and we expect this portfolio of industry-leading brands to grow 9% annually through 2022.
This growth justifies a premium valuation for Allergan’s stock.

Allergan has six drugs in late-stage development with potential peak sales of $500 million to $2 billion annually. These include new treatments for chronic migraines, macular degeneration, and depression that could be reach the market in the next 2-3 years.

In 2017, Allergan shares significantly underperformed the market. We expect a recovery in 2018, but if
that fails to materialize organically, the company could pursue several avenues for value creation, including the sale of non-core assets and a potential split of the company to unlock the value of Botox and the aesthetics business.

We expect Allergan shares to benefit as investors consider the growth opportunities for the company beyond 2018. We estimate EPS can grow from $15.45 in 2018 to $16.75 in 2019 and calculate
a 2019 Private Market Value of 294 dollars per share.



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