Mylan N.V. (NASDAQ:MYL) — Several analysts have raised their earnings estimates and price targets for MYL stock following the company’s Q4 report last week. The leading maker of generic pharmaceuticals delivered better-than-expected earnings and upbeat 2015 guidance.
On March 3, S&P Capital IQ increased its 2015 EPS estimate to $4.15 from $4.06. Its analysts maintained their “buy” rating on MYL stock and raised their price target to $66 from $64.
Morgan Stanley (NYSE:MS) analyst David Risinger noted that MYL stock has one of the lowest multiples in the industry. He placed an “overweight” rating on shares with a price target of $67.
Mylan completed its acquisition of the non-U.S. developed markets generic unit of Abbott Laboratories (NYSE:ABT) in late February. The deal added roughly $2 billion in annual revenue and allowed the company to relocate its headquarters to the Netherlands. Management expects this move will lower the company’s tax rate from 25% to 20%-21% after the first year and to the high teens afterward. Capital IQ said it sees Mylan making additional acquisitions this year.
Technically, MYL stock has been on a steady ascent since it broke from a three-year consolidation in 2012 at about $25. Since then, shares have advanced from a series of consolidations following buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR). These advances have been accompanied by high volume, like the break in October.
Last week, MYL stock broke above its 50-day moving average at $55.61, but retreated on Friday, falling below the breakout point due to a round of profit-taking in the broader market. This pullback could provide an excellent opportunity to purchase shares of this well-managed pharmaceutical company.
Buy MYL stock under $54. My trading target is $64, which would result in a gain of 19%; however, long-term investors may want to hold shares for a much higher return.
