The company has announced a significant deterioration in the performance of its generic products since the first half results because of increased competition and US$4m in one-off adverse items. The high-margin specialty brands revenue is also weaker than expected.
Revenue declined -15% in January to April and gross profit was down -20%. The company is currently reviewing the carrying value of generic assets which could result in an impairment.
Credit Suisse downgrades to Neutral from Outperform and reduces the target to $0.64 from $1.00. The broker envisages merit in the strategy to pivot towards the more stable earnings profile in specialty brands but the outlook for FY20 remains unclear.
Sector: Pharmaceuticals, Biotechnology & Life Sciences.
Target price is $0.64.Current Price is $0.56. Difference: $0.08 – (brackets indicate current price is over target). If MYX meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
