Broker Recommendations for ACR
CIMB Securities 03-May-13
CIMB's confidence in the stock has increased thanks to strong first quarter net sales of Axiron by Eli Lilly. Acrux is now now virtually assured of receiving a US$25 million milestone payment in FY14. Falling rebates, a price rise and market share gains have delivered the strongest sales quarter since the product was launched last year.
The broker views any weakness in the share price back to $3.80 as a buying opportunity. The Outperform rating and $4.23 price target are maintained.
Outperform
Macquarie 29-Apr-13
Eli Lilly appears to be gaining traction with Axiron and rebates have moved to 54% from 68%. Macquarie does not think rebates will move below what established competitors offer, given the lack of differentiation in the market and that Axiron is a newer arrival. Nevertheless, the reduction in rebate suggests to the broker that Lilly is getting pricing traction with insurers.
This alleviates some concerns Macquarie had and Acrux's rating has been upgraded to Neutral from Underperform. The price target is raised to $3.50 from $2.98.
The broker does see a risk of earnings growth slowing given the flat trend recently and the cycling of tough comparatives. FY13 earnings forecasts have been raised 23.2% and FY14 lowered 1.7%.
Upgrade to Neutral from Underperform
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