Proposed Combination with Baxalta on Track to Close in Mid-2016
Shire plc (LSE: SHP, NASDAQ: SHPG) acknowledges the US Treasury notice
published on April 4, 2016, and anticipates the Baxalta transaction will
proceed as originally announced on January 11, 2016.
The combination of Shire and Baxalta is based on a strong strategic rationale
to create the leading global biotechnology company focused on rare diseases.
The company currently expects to complete its proposed combination by mid-2016
as previously announced.
NOTES TO EDITORS
Shire enables people with life-altering conditions to lead better lives.
Our strategy is to focus on developing and marketing innovative specialty
medicines to meet significant unmet patient needs.
We focus on providing treatments in Rare Diseases, Neuroscience,
Gastrointestinal and Internal Medicine and we are developing treatments for
symptomatic conditions treated by specialist physicians in other targeted
therapeutic areas, such as Ophthalmics.
Lowering 2016 Organic Revenue Growth to Match Consensus But Maintaining EPS
We are lowering our revenue forecast for Mondelez to align more closely with consensus of 2% organic growth for 2016 due to our concerns about macroeconomic weakness in Brazil and Russia. That said, our overall revenue growth estimate for the year remains relatively the same due to easing foreign exchange headwinds since the start of the year (-5% instead of -6%). We maintain our $1.76 EPS estimate because of the significant flexibility from cost savings and perhaps $0.02 or so of benefit from easier currency (previously $0.13).
Favourable tracking data in developed markets (60% of sales). Our Nielsen data indicates a growth rate of 2-3% for Mondelez in Western Europe and 1.5% in the U.S. In Europe, Mondelez chocolate grew 5% and biscuits grew 2% as the company regained shelf space in Germany at a major discount retailer. LU biscuits in France, however, lost market share and declined.
Emerging markets remain weak. Management warned investors to expect weaker performance in Brazil and Russia at the start of the year, but conditions worsened due to declining consumer demand. We have reduced our organic sales forecast for developing markets to -4.9% for 2016 compared to -20.6% for 2015.
Valuation. Our target price of $48 assumes a 23x multiple against our 2017 EPS estimate. This is a ~18% premium to staples peers which we believe is appropriate given the strong visibility into margin expansion and the potential growth profile of its global snack business.
if Musk can deliver...but it will say he can for months...
IMF: cutting labor taxes are particularly effective as a stimulus - IMF Economic Outlook Report
Gapping down
In reaction to disappointing earnings/guidance: CREE -17.4%, AYI -3.2%,MON -1.4%, WYNN -0.5%
M&A news: AGN -1.4% (Pfizer confirms its and Allergan (AGN) will terminate their planned merger)
Select metals/mining stocks trading lower: BBL -2.4%, MT -2.2%, BHP -2%,HMY -1.9%, RIO -1.8%, ABX -1.6%, GG -1.3%, GDX -1.2%
Other news: DRWI -5.2% (following 45%+ move higher), HTA -2.5% (prices 5.2 mln shares of common stock at $28.90 per share), DOC -1.1% (upsizes offering by 4.5 mln shares and prices 22.5 mln common shares at $17.85)
Analyst comments: MAT -3.6% (downgraded to Hold on valuation at Stifel), SIMO -2.4% (downgraded to Neutral from Buy at Ladenburg Thalmann), CCOI -2% (downgraded to Neutral from Buy at Citigroup),NVDA -1.4% (downgraded to Hold at Stifel ), CMI -1.1% (downgraded to Neutral from Buy at Buckingham Research), TKC -0.7% (downgraded to Neutral from Overweight at JP Morgan), CF -0.5% (downgraded to Neutral from Buy at BofA/Merrill)
In reaction to disappointing earnings/guidance: CREE -17.4%, AYI -3.2%,MON -1.4%, WYNN -0.5%
M&A news: AGN -1.4% (Pfizer confirms its and Allergan (AGN) will terminate their planned merger)
Select metals/mining stocks trading lower: BBL -2.4%, MT -2.2%, BHP -2%,HMY -1.9%, RIO -1.8%, ABX -1.6%, GG -1.3%, GDX -1.2%
Other news: DRWI -5.2% (following 45%+ move higher), HTA -2.5% (prices 5.2 mln shares of common stock at $28.90 per share), DOC -1.1% (upsizes offering by 4.5 mln shares and prices 22.5 mln common shares at $17.85)
Analyst comments: MAT -3.6% (downgraded to Hold on valuation at Stifel), SIMO -2.4% (downgraded to Neutral from Buy at Ladenburg Thalmann), CCOI -2% (downgraded to Neutral from Buy at Citigroup),NVDA -1.4% (downgraded to Hold at Stifel ), CMI -1.1% (downgraded to Neutral from Buy at Buckingham Research), TKC -0.7% (downgraded to Neutral from Overweight at JP Morgan), CF -0.5% (downgraded to Neutral from Buy at BofA/Merrill)
Gapping up
In reaction to strong earnings/guidance: OMN +29.9%, APRI +17.6%, STZ+2.8%, (also to acquire The Prisoner Wine Company's portfolio of brands from Huneeus Vintners) GPN +1.7%
M&A news: PLCM +8.4% (Bloomberg reports Co is in advanced merger talks with MITL), PFE +1.1% (Pfizer confirms its and Allergan (AGN) will terminate their planned merger), AMZN +0.6% (acquired AI startup Orbeus, according to Bloomberg)
Select Large pharma related names showing strength: AZN +2.3%, SHPG+2.1%, GSK +0.9%
Select oil/gas related names showing strength: WLL +4%, CHK +3.7%, SWN+3.2%, RIG +2.2%, RIG +2.1%, MRO +1.8%, CVX +0.9%, XOM +0.7%
Other news: SUNE +30.4% (cont vol pre-mkt), TSRO +5.7% (Tesaro and Janssen Biotech, a Johnson & Johnson (JNJ) unit, announce collaboration and license agreement focused on the development and commercialization of niraparib specifically for the treatment of prostate cancer), OAS +3.6% (commences an open season for the Johnson's Corner Pipeline Project),LINE +3.2% (enters into settlement agreement with certain debt holders),AYI +1.8% (following CREE results; AYI reports tomm), NOK +1.7% (begins restructuring, job cuts), LGIH +1.5% (reported March closing +23 YoY),KMDA +1.3% (initiates phase 2 clinical trial with intravenous alpha-1 antitrypsin for the prevention of lung transplant rejection)
Analyst comments: SRPT +7.5% (target raised to $60 from $45 at Oppenheimer ), CDK +1.5% (upgraded to Neutral from Underweight at JP Morgan), CSCO +1.2% (upgraded to Neutral from Underweight at JP Morgan), CELG +0.8% (initiated with Outperform ratings at BMO Capital),AAPL +0.7% (initiated with a Strong Buy at Needham)
In reaction to strong earnings/guidance: OMN +29.9%, APRI +17.6%, STZ+2.8%, (also to acquire The Prisoner Wine Company's portfolio of brands from Huneeus Vintners) GPN +1.7%
M&A news: PLCM +8.4% (Bloomberg reports Co is in advanced merger talks with MITL), PFE +1.1% (Pfizer confirms its and Allergan (AGN) will terminate their planned merger), AMZN +0.6% (acquired AI startup Orbeus, according to Bloomberg)
Select Large pharma related names showing strength: AZN +2.3%, SHPG+2.1%, GSK +0.9%
Select oil/gas related names showing strength: WLL +4%, CHK +3.7%, SWN+3.2%, RIG +2.2%, RIG +2.1%, MRO +1.8%, CVX +0.9%, XOM +0.7%
Other news: SUNE +30.4% (cont vol pre-mkt), TSRO +5.7% (Tesaro and Janssen Biotech, a Johnson & Johnson (JNJ) unit, announce collaboration and license agreement focused on the development and commercialization of niraparib specifically for the treatment of prostate cancer), OAS +3.6% (commences an open season for the Johnson's Corner Pipeline Project),LINE +3.2% (enters into settlement agreement with certain debt holders),AYI +1.8% (following CREE results; AYI reports tomm), NOK +1.7% (begins restructuring, job cuts), LGIH +1.5% (reported March closing +23 YoY),KMDA +1.3% (initiates phase 2 clinical trial with intravenous alpha-1 antitrypsin for the prevention of lung transplant rejection)
Analyst comments: SRPT +7.5% (target raised to $60 from $45 at Oppenheimer ), CDK +1.5% (upgraded to Neutral from Underweight at JP Morgan), CSCO +1.2% (upgraded to Neutral from Underweight at JP Morgan), CELG +0.8% (initiated with Outperform ratings at BMO Capital),AAPL +0.7% (initiated with a Strong Buy at Needham)