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Mylan (MYL) Up 10.2% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Mylan N.V. (MYL - Free Report) . Shares have added about 10.2% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is MYL due for a pullback? 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 Q1 Earnings Lag on Weak North America Sales

Mylan reported disappointing results for the first-quarter as earnings and sales both missed estimates.

Adjusted earnings of $0.96 per share missed the Zacks Consensus Estimate of $0.99 but was up from $0.93 in the year-ago quarter.

First-quarter revenues of $2.68 billion missed the Zacks Consensus Estimate of $2.78 billion and were down 1% from the prior-year period.

Quarter in Detail

The company posts results in three segments on a geographic basis namely North America, Europe and Rest of World.

North America segment’s third-party net sales came in at $985.3 million, down 19% due to a decrease in the sales of branded products, including EpiPen Auto-Injector, the impact of the loss of exclusivity of olmesartan and olmesartan HCTZ and the prior-year divestiture of certain contract manufacturing assets.Sales were adversely impacted due to the implementation of new accounting standards along with lower volumes, and to a lesser extent, pricing, on other existing products partially offset by new product introductions.

Third-party net sales from Europe were $1.04 billion, up 16%. This was propelled by new product introductions across the region combined with volume expansion which offset the impact of pricing on existing products.  Favorable foreign currency translation positively impacted sales by 14%.

Rest of World segment’s third-party net sales of $626.7 million was up 8%, driven by new products and increased volume from the anti-retroviral franchise and higher sales in the emerging markets.

Adjusted gross margin of 52.9% was down from 53.5% in the year-ago quarter.
During the quarter, Mylan repurchased 9.8 million ordinary shares for $432.0 million completing the previously authorized share repurchase program.

2018 Outlook Reiterated

Mylan expects revenues of $11.75-$13.25 billion in 2018 while the Zacks Consensus Estimate stands at $12.45 billion. Mylan anticipates adjusted EPS of around $5.20-$5.60 in 2018 while the Zacks Consensus Estimate is pegged at $5.35.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to three lower.

Mylan N.V. Price and Consensus

 

Mylan N.V. Price and Consensus | Mylan N.V. Quote

VGM Scores

At this time, MYL has a nice Growth Score of B, a grade with the same score on the momentum front. 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 those looking for growth and momentum.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, MYL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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