Healthcare Business

Analysts Adjust Predictions on Medivation Buyout Price

Paul Ausick

One time when missing earnings estimates doesn’t matter much is when there is bidding war for the company. That’s the position that Medivation Inc. (NASDAQ: MDVN) found itself in after reported a substantial earnings miss after markets closed last Thursday.

The company reported adjusted earnings per share of $0.11, less than half the consensus estimate of $0.23. Shares rose anyway, up 1.3% by Friday’s close at $60.

Medivation has rejected as “opportunistic” a buyout offer valued at around $9.3 billion from Sanofi (NYSE: SNY). That was $52.50 per share, but that almost certainly won’t be enough. Big pharma guns including Pfizer Inc. (NYSE: PFE) and Amgen Inc. (NASDAQ: AMGN) have also been mentioned as possible bidders. and Medivation may be worth as much as $70 a share to some of Sanofi’s potential challengers.

Analysts were unanimous in raising price targets though some were a bit more restrained than others:

  • Barclays raised its price target from $48 to $70 with an Overweight rating.
  • BMO lifted its price target from $47 to $50 and rates the stock Market Perform.
  • Jefferies boosted its price target from $52.00 to $56.00 with a Hold rating.
  • JMP Securities raised its price target from $56 to $73.
  • Leerink upped its price target from $39 to $64.
  • RBC lifted its price target from $40 to $70 with a Sector Perform rating.
  • Wedbush raised its price target to $63.

Medivation stock closed at $60.00 on Friday, up 1.3% for the day, in a 52-week range of $26.41 to $66.40. The consensus price target is $60.17, although many of these changes may not be included yet. The high target is $76 and the low target is $39.