Yes it looks promising up 2.16% n the first half hour's trading.
There are some glitches in an otherwise good report.
Subject: Broker recommentations
Company: Shire Pharmaceuticals Group PLC
Date: Wed 1st May 2002 14:23:00
Country: United Kingdom
Industry: Health care
STOCKWATCH Shire Pharmaceuticals jumps higher after Q1 numbers please
LONDON (AFX) - Shares in Shire Pharmaceuticals Group PLC jumped higher in
early afternoon trade, extending earlier gains following the release of stronger
than expected Q1 results and a slightly brighter outlook statement from the blue
chip firm, which had issued an earnings growth alert at the time of its full
year numbers in February, dealers said.
At 2.16 pm, Shire's shares topped the FTSE 100 leaders board with a 35 pence
advance to 544, just below their session peak at 545 touched following the
results announcement.
At the same time, the FTSE 100 index was 12.3 points lower at 5,153.3.
Earlier this afternoon, Shire reported pretax profit of 77.5 mln usd in the
first quarter, up 40 pct from the year earlier's 55.4 mln.
The company repeated its warning given at the year end that higher costs and
new competition will hit growth, but it held out "the prospect of some earnings
growth" this year.
Growth was driven by dramatic revenue gains from the growth of the group's
Adderall Attention Deficit Hyperactivity Disorder (ADHD) franchise following the
launch last year of the new Adderall XR once-a-day formula.
But the group reiterated its gloomy forecasts from the year end that
earnings growth this year will be hit by the double impact of higher new product
launch spending, and the effects of new generic competition for traditional
Adderall.
In its quick initial reaction, 'house' broker Merrill Lynch pointed out with
the reassurance given by the company's new outlook, it is raising its revenue
growth forecast for Shire to 13 pct from 8,
However, Merrill has said the associated rise in projected sales, general
and administration costs, and R&D spending limited the scope for an EPS upgrade.
The broker, therefore, said its 2002 fully diluted EPS forecast of 30.3
pence, flat on 2001, remains unchanged, although it continues to forecast 2003
EPS growth of 17 pct to 35.4 pence.
Merrill pointed out that, in its view, Shire has reported an encouraging sta
rt to what is expected to be a tough year given the introduction of generic
Adderall.
The broker said it sees the Q1 results and associated comfort given on the
full year outcome as an important step forward for investor sentiment.
Merrill added that on its forecasts Shire's shares trade at 1.0 times long
term growth, where, in its view, a more appropriate valuation, in line with the
Specialty peer group would be 1.3 times, which implies a share price of around
700 pence for Shire.
The broker reiterated its 'buy' rating on the stock.
jmh/kl
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