MYL - Embedded Expectations Analysis - 2018 05 23
Mylan N.V. (MYL:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 10.2x Uniform P/E. At these levels, the market is pricing in fairly bearish expectations for the firm, which likely supports longer-term outperformance should MYL just maintain profitability at analyst-projected levels despite management's negative sentimentSpecifically, management may be exaggerating their expectation for Advair to be
AB-rated, given their concerns regarding the science of the drug, and may be concerned about their Glatiramer launch in Europe throughout the remainder of 2018. Additionally, they may lack confidence in the sustainability of increased Copaxone conversion as a result of the tender market in Europe, and may also lack confidence in the sustainability of year-over-year growth at current levels in their ARV business. That said, market expectations are for Uniform ROA to fall to levels not seen since 2007. At these valuations, should the firm maintain Uniform ROA at current levels, equity upside is likely warranted
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