A Look at Shire’s Valuation on September 19

Shire’s valuation

Shire (SHPG) is a biotechnology company focused on the discovery, development, and commercialization of specialized medicines for the treatment of rare diseases and other specialized conditions.

Shire reported adjusted EPS of $3.88 on revenue of ~$3.9 billion in the second quarter, a 4.6% YoY (year-over-year) rise from $3.7 billion in the second quarter of 2017.

A Look at Shire’s Valuation on September 19

The chart above shows a comparison of Shire’s revenues and EPS since the first quarter of 2017. Now let’s take a look at the company’s valuation multiples.

Forward PE

Shire is currently trading at a forward PE multiple of ~11.4x, while the industry average forward PE multiple is ~15.5x as of September 19. Competitors Sanofi (SNY), GlaxoSmithKline (GSK), and AstraZeneca (AZN) are trading at forward PE multiples of 13.3x, 13.2x, and 21.5x, respectively.

Forward EV-to-EBITDA

Shire is currently trading at a forward EV-to-EBITDA (enterprise value-to-EBITDA) multiple of ~10.6x, higher than the industry average of ~11.8x as of September 19. Sanofi, GlaxoSmithKline, and AstraZeneca are trading at forward EV-to-EBITDA multiples of 10.8x, 9.7x, and 14.0x, respectively.

Forward EV-to-revenue

Shire is currently trading at a forward EV-to-revenue multiple of ~4.6x, while the industry average is ~4.7x as of September 19. Sanofi, GlaxoSmithKline, and AstraZeneca are trading at forward EV-to-revenue multiples of 3.2x, 3.1x, and 4.7x, respectively.

The Invesco International Dividend Achievers ETF (PID) holds 0.3% of its total investments in Shire and 2.6% in Sanofi.