It has been about a month since the last earnings report for Mylan (MYL). Shares have lost about 18.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Mylan due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Mylan Q1 Earnings Beat Estimates, Revenues Miss
Mylan reported adjusted earnings of 82 cents per share in the first quarter of 2019, which beat the Zacks Consensus Estimate of 79 cents but declined from 96 cents in the year-ago quarter.
However, first-quarter revenues of $2.50 billion missed the Zacks Consensus Estimate of $2.69 billion and declined 7% from the prior-year quarter.
Quarter in Detail
The company posts results in three segments on a geographic basis — North America, Europe and Rest of World.
North America segment’s net sales came in at $922.9 million, down 6% year over year. This decline is primarily attributable to lower volumes of existing products due to changes in the competitive environment and remediation activities at the Morgantown plant. Pricing also declined from the year-ago quarter.
Net sales in the Europe segment were $895.3 million, down 14% due to unfavorable impact of foreign currency translation, lower volumes of existing products driven by the timing of purchases of the company’s products by customers and temporary business disruptions due to the adoption of serialization across Europe, and pricing.
Rest of World segment’s net sales of $642.4 million were up 3%, driven by new product sales and higher volumes of existing products.
Adjusted gross margin of 54% increased from 53% in the year-ago quarter.
The company reaffirmed its guidance for 2019. Revenues are projected between $11.5 billion and $12.5 billion.
The company anticipates adjusted EPS around $3.80-$4.80.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -5.49% due to these changes.
At this time, Mylan has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Mylan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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