Mallinckrodt’s share price movements
On August 7, Mallinckrodt (MNK) reported revenues of ~$631.7 million for the second quarter, which is ~5.3% growth YoY (year-over-year) on a reported basis and 5.0% on a constant currency basis. The company reported non-GAAP EPS of $1.78, which is a rise of 30.9% YoY. The company beat Wall Street analysts’ revenue and non-GAAP EPS estimates for the second quarter by $11.31 million and $0.30, respectively. Mallinckrodt’s strong financial performance, driven by the solid uptake of hospital franchise products like INOMAX, OFIRMEV, and H.P. Acthar Gel, increased the company’s share price 20.9% to $40.84 on August 7.
In Mallinckrodt’s second-quarter conference call, the company raised its guidance for YoY growth in net sales from the previously projected range of 3%–6% to 4%–7% for fiscal 2018. The company also raised the guidance for its adjusted diluted EPS from the previously projected range of $6.00–$6.50 to $6.50–$6.90 for fiscal 2018.
Mallinckrodt expects to witness mid to high single-digit growth for its hospital product franchise in the second half of 2018. The company also expects H.P. Acthar Gel to report revenues above $1.0 billion for fiscal 2018.
Analysts’ recommendations for Mallinckrodt
Of the 18 analysts covering Mallinckrodt in August, one analyst recommended a “strong buy,” three recommended a “buy,” 12 recommended a “hold,” and two recommended a “sell.” Wall Street analysts have projected the 12-month consensus target price for Mallinckrodt to be ~$25.11, which would be a decline of ~14.7% over the company’s closing price on August 7.
Analysts’ recommendations for Mallinckrodt’s peers
Of the 20 analysts covering Mylan (MYL) in August, ~65.0% recommended the company as a “buy.” About 77.3% of the 22 analysts covering Jazz Pharmaceuticals (JAZZ) recommended a “buy,” while 22.2% of the 18 analysts tracking Endo International (ENDP) recommended a “buy.”