A month has gone by since the last earnings report for Mylan N.V. . Shares have lost about 12.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Mylan Earnings & Revenues Miss on EpiPen Woes
Mylan’s third-quarter 2016 earnings of $1.38 per share missed the Zacks Consensus Estimate of $1.50 and declined 3% from the year-ago quarter, reflecting significant contribution from new products in the prior-year period.
In the third quarter, Mylan booked a $465 million charge related to the settlement with the DoJ and other government agencies regarding the classification of, EpiPen, for purposes of the Medicaid Drug Rebate Program. Including this charge and other one-time items, Mylan incurred a loss of $0.23 per share in the third quarter of 2016.
Revenues in the reported quarter came in at $3.06 billion, falling short of the Zacks Consensus Estimate of $3.23 billion. However, the top line improved 13% year over year on the back of acquisitions and new product launches.
Acquisitions Boost Generics, EpiPen Hits Specialty
Generics third-party net sales, derived from North America, Europe and the Rest of the World, surged 17% to $2.61 billion. Segmental third-party net sales inched up 1% to $1.10 billion in North America. The upside in sales was driven by the acquisitions of Meda and the non-sterile, topicals-focused business from Renaissance Acquisition Holdings, and to a lesser extent, by new products launches, partially offset by lower pricing and lower volumes of existing products due to increased competition.
Third-party net sales from the European markets surged 38% to $842 million on the back of net sales from the Meda acquisition, and to a lower extent, net sales of new products. Unfavorable foreign currency translation had an impact of 1% within Europe. Adjusted third-party net sales in Europe increased 34%.
Third-party net sales from the Rest of the World soared 25% to $670 million, reflecting incremental net sales from the Meda acquisition primarily in emerging markets, and to a lesser extent, net sales of new products. Additionally, net sales of existing products improved marginally, as higher volumes offset lower pricing throughout the region, including the anti-retroviral (ARV) franchise. Sales within the ARV franchise improved gradually throughout the quarter as HIV tender volumes rose. Foreign currency translation had a favorable impact of 5% in the Rest of the World.
However, third-party net sales at the Specialty segment slipped 4% to $418.7 million, reflecting lower volumes due to the timing of wholesaler purchases of EpiPen in anticipation of an authorized generic launch.
Adjusted gross margin during the third quarter of 2016 shrank to 57% from 58% in the year-ago quarter.
2016 Outlook Intact
Mylan has reiterated its outlook for 2016, which it had provided in early Oct 2016. The company expects earnings in the range of $4.70–$4.90 per share.
Meanwhile, Mylan continues to target earnings of $6.00 per share in 2018, with growth anticipated in the low teens in both 2017 and 2018.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one upward revision for the current quarter compared to one downward. In the past month, the consensus estimate shifted downward by 10.9% due to these changes.
VGM Scores
At this time, Mylan's stock has a nice Growth score of 'B', a grade with the same score on the momentum front. Also, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than growth and momentum investors.
Outlook
Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Mylan (MYL) Down 12.6% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Mylan N.V. . Shares have lost about 12.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Mylan Earnings & Revenues Miss on EpiPen Woes
Mylan’s third-quarter 2016 earnings of $1.38 per share missed the Zacks Consensus Estimate of $1.50 and declined 3% from the year-ago quarter, reflecting significant contribution from new products in the prior-year period.
In the third quarter, Mylan booked a $465 million charge related to the settlement with the DoJ and other government agencies regarding the classification of, EpiPen, for purposes of the Medicaid Drug Rebate Program. Including this charge and other one-time items, Mylan incurred a loss of $0.23 per share in the third quarter of 2016.
Revenues in the reported quarter came in at $3.06 billion, falling short of the Zacks Consensus Estimate of $3.23 billion. However, the top line improved 13% year over year on the back of acquisitions and new product launches.
Acquisitions Boost Generics, EpiPen Hits Specialty
Generics third-party net sales, derived from North America, Europe and the Rest of the World, surged 17% to $2.61 billion. Segmental third-party net sales inched up 1% to $1.10 billion in North America. The upside in sales was driven by the acquisitions of Meda and the non-sterile, topicals-focused business from Renaissance Acquisition Holdings, and to a lesser extent, by new products launches, partially offset by lower pricing and lower volumes of existing products due to increased competition.
Third-party net sales from the European markets surged 38% to $842 million on the back of net sales from the Meda acquisition, and to a lower extent, net sales of new products. Unfavorable foreign currency translation had an impact of 1% within Europe. Adjusted third-party net sales in Europe increased 34%.
Third-party net sales from the Rest of the World soared 25% to $670 million, reflecting incremental net sales from the Meda acquisition primarily in emerging markets, and to a lesser extent, net sales of new products. Additionally, net sales of existing products improved marginally, as higher volumes offset lower pricing throughout the region, including the anti-retroviral (ARV) franchise. Sales within the ARV franchise improved gradually throughout the quarter as HIV tender volumes rose. Foreign currency translation had a favorable impact of 5% in the Rest of the World.
However, third-party net sales at the Specialty segment slipped 4% to $418.7 million, reflecting lower volumes due to the timing of wholesaler purchases of EpiPen in anticipation of an authorized generic launch.
Adjusted gross margin during the third quarter of 2016 shrank to 57% from 58% in the year-ago quarter.
2016 Outlook Intact
Mylan has reiterated its outlook for 2016, which it had provided in early Oct 2016. The company expects earnings in the range of $4.70–$4.90 per share.
Meanwhile, Mylan continues to target earnings of $6.00 per share in 2018, with growth anticipated in the low teens in both 2017 and 2018.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one upward revision for the current quarter compared to one downward. In the past month, the consensus estimate shifted downward by 10.9% due to these changes.
Mylan N.V. Price and Consensus
Mylan N.V. Price and Consensus | Mylan N.V. Quote
VGM Scores
At this time, Mylan's stock has a nice Growth score of 'B', a grade with the same score on the momentum front. Also, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than growth and momentum investors.
Outlook
Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.