MYL - Embedded Expectations Analysis - 2019 03 19
Mylan N.V. (MYL:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) Earnings, with an 8.6x Uniform P/E, implying expectations for profitability to fall to historically low levels. Despite management's near-term concerns about product launches, growth opportunities, and plant restructuring, these expectations are overly bearish, and upside is likely warranted.Specifically, management may lack confidence in their ability to improve short-term performance with the YUPELRI and Fulphila product launches, and may be exaggerating investment opportunities, specifically in oncology, and their focus on investment and strategic execution. Moreover, they may lack confidence in their ability to sustain revenue growth across key global brands and segments, and may be overstating benefits from their past investments, particularly in specialty and biologics products. Furthermore, they may be concerned about the progress of their Morgantown plant restructuring, sales and marketing team capabilities, business partnerships, and seasonality.
That said, market expectations are overly bearish, and even with potential near-term headwinds, long-term outperformance remains warranted should MYL maintain profitability near current levels.
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