S&P REITERATES BUY OPINION ON SHARES OF FOREST LABORATORIES
S&P Marketscope -
Symbol Last Chg
FRX Trade 38.26 -2.12
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SNPMarketScopeResearchNotes2007-10-16 11:27:25.000FRXFOREST LABSH.SaftlasS&P REITERATES BUY OPINION ON SHARES OF FOREST LABORATORIESSep-Q operating EPS rises to $0.86 from year-ago $0.75, surpassing our estimate by $0.08. Results exclude $0.15 charge from in-licensing an R&D compound. Sales gains in Lexapro (+7%) and Namenda (+23%) were in line with our forecasts, and gross margins expanded to 77.4% from 76.2%. Despite past pipeline setbacks, we still think new drugs such as Nebivolol, milnaciprin and others should be able to replace Lexapro and Namenda, which lose patent protection in '12 and '13, respectively. We are lowering our 12-month target by $7 to $50, on revised DCF and forward P/E assumptions.
All companies need to spend money on new R&D to continue to make future money. Today's decline is unwarranted as the drop in the reported net income was due to the extra spending on R&D. Without this one time charge, this stock went up $0.12 from target forecast and even $0.03 from the highest estimate out there. They whooped all the forecasts to death. Gotta love it.
well I figured there will be selling on the news, but these earnings and forecast are good news on a bad stock day. I think we'll head higher by year end. I expect Forest will be also be making more deals in the future which will help the stock.
At least they aren't putting all the flood of money they are getting and chucking into some bank account to collect 'interest'. If they continue to invest smartly into their future growth, things will look up. Sentiment for the short term may look poor but its a way for the shorts to get your stocks cheap and later ride this thing through the roof. Hold on to your hats folks.