Lundbeck (Buy, TP: DKK310.00) - Organic growth to return in 2020e
Q4 sales beat expectations (c4.0% above our estimate and 4.8% above consensus). The 6.6% EBIT margin was better than our forecast of c6.3%. The 2020 guidance is wide and conservative in our view, with revenue of DKK17.4bn–18.0bn and EBIT of DKK2.2bn–2.7bn, signalling a return to organic growth but also high investments. We see consensus 2020e EPS down c3% based on the guidance, and a 3%+ negative share price reaction today.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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