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Mylan’s Earnings Projections in 2018

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Earnings guidance

According to Mylan’s (MYL) third-quarter earnings conference call, the company expects to witness an adjusted EPS of $4.55–$4.90 in 2018. The range implies an increase of 4% at the midpoint on a YoY (year-over-year) basis.

Wall Street analysts expect Mylan to report an adjusted EPS of $4.70 in 2018, which will be a rise of 2.99% YoY. The company is expected to witness an adjusted EPS of $5.16 in 2019, which will be a rise of 9.77% YoY. Wall Street analysts also expect Mylan to report an adjusted EPS of $5.59 in 2020, which will be a rise of 8.47% YoY.

Wall Street analysts expect Mylan’s adjusted EPS to be $1.42 in the fourth quarter, which will be a decline of 1.04% YoY.

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Free cash flow trends

Mylan expects the adjusted free cash flow to fall by $2.1 billion–$2.5 billion in 2018.

In the first nine months of 2018, the company reported an adjusted free cash flow close to $2.0 billion. According to Mylan’s third-quarter earnings conference call, the company managed to report an adjusted free cash flow conversion, which is 119% of its adjusted net earnings.

Mylan reported a debt-to-adjusted EBITDA ratio of 3.8x at end of the third quarter. The company is focused on reducing its debt in the second half of 2018 and maintaining its “investment grade” rating. Mylan plans to repay ~$1.2 billion of its debt, which will be maturing by the end of 2019. According to Mylan’s third-quarter earnings conference call, 500 million euros of the debt will be maturing by the end of 2018, while the rest of the debt will be maturing in 2019.

Mylan is focused on reaching its long-term goal of an average debt-to-EBITDA ratio of 3.0x.

Next, we’ll discuss Mylan’s growth prospects in the North American market in 2018.

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