Wednesday, December 15, 2010

Mylan (NASDAQ:MYL) Continues to be Weighed Down by Debt Worries

After the disastrous debt risk of 2008-2009 of Mylan (NASDAQ:MYL), the company has lowered its leverage, and Needham believes the improvements haven't been rightly appreciated by the equity capital markets.

Needham said, "The age-old axiom holds that less risk equals greater valuation, at least in theory. In the case of MYL however, we would argue that a significant decrease in financial risk post the leverage apocalypse of 2008-09, has been underappreciated by the equity capital markets. While near-term investor focus will likely remain fixated on EPS catalysts and the never ending quest for numbers visibility, potential upside based upon increased crystallization of the 2011 EPS outlook could get an added boost from multiple expansion as shares continue to be undeservedly weighed down by debt concerns."

Needham & Company maintains a "Strong Buy" on Mylan, which closed Tuesday at $20.68, up $0.85, or 4.26 percent. Needham has a price target of $26 on them.

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