RBC Is Bullish on Generic Pharma: Upgrades MYL, AMRX, ENDP, AKRX

RBC updates its view on the generic pharma industry

Today, RBC Capital Markets issued a report providing an upgraded outlook on the generic pharma industry. The firm has a bullish stance on this industry, which is currently under immense pricing pressure and has received attention from the US government related to drug pricing issues.

However, RBC Capital Markets currently sees the industry challenges moderating over the medium to long term and as generic pharma companies deliver improved performance. RBC analyst Randall Stanicky believes that the sector is heading into a trough and expects to see an up cycle in the second half of 2019.

RBC Is Bullish on Generic Pharma: Upgrades MYL, AMRX, ENDP, AKRX

RBC upgraded its recommendation on MYL

Today, RBC Capital Markets upgraded its recommendation on Mylan (MYL) stock from “sector perform” to “outperform.” RBC raised its target price on MYL stock from $42 to $51, citing a tactical upside in the stock.

Multiple brokerages including Raymond James, J.P. Morgan, and Leerink cut their target prices on MYL stock on August 9. This trend followed the company’s disappointing second-quarter earnings results, which failed to meet analysts’ estimates.

Mylan also lowered its fiscal 2018 guidance during its earnings release. The chart above shows the recommendation summary for MYL stock over the last few months.

AMRX, ENDP, and AXRX

RBC Capital Markets views solid growth potential for Amneal Pharmaceuticals (AMRX), which the firm noted is the “best positioned” in the industry. RBC Capital Markets upgraded its recommendation on AMRX stock from “market perform” to “outperform” while raising its target price from $17 to $27.

RBC also raised its target price on Endo International (ENDP) today from $8 to $26 while upgrading its recommendation from “sector perform” to “outperform.” RBC Capital Markets noted that Endo International is most levered to the generic pharma industry turnaround. ENDP stock was up ~2.6% in premarket trading.

RBC Capital Markets believes that Akorn (AKRX) has a “solid event set-up” as the Fresenius (FMS)—Akorn deal case ensues. On July 25, RBC raised its target price on Akorn from $25 to $27 on July 25.