Lundbeck (Buy, TP: DKK290.00) - Strategic brands drive up guidance
Q3 revenue was slightly below our estimate, but key products sales beat our forecast by c3%, driving a guidance raise on the top line and earnings. The Q3 EBIT miss was partly due to a DKK55m admin cost related to the Alder acquisition, which we had booked in Q4, and still-high SG&A costs. Consensus does not factor in additional Alder-related SG&A costs in 2020, but we have raised our 2019–2020 forecasts and upped our target price to DKK290 (270). We reiterate our BUY.H. Lundbeck develops, produces and markets drugs for treating diseases of the central nervous system. Products include antidepressants for the treatment of depression, panic disorder, and prevention of relapse/recurrence. Antipsychotic products for psychotic disorders; schizophrenia, anxiety, restlessness and insomnia; treatment of psychotic disorders; acute psychotic episodes, exacerbation of psychotic disorders. Co.'s products inclue Cipralex®/Lexapro® for the treatment of depression and anxiety; Ebixa® for the treatment of Alzheimer's disease; Azilect® for the treatment of Parkinson's disease; Xenazine®, Sabril®, Saphris® Sycrest®, Onfi, and other.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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