Here’s yet another exhibit for the jury to consider in the case of Sanity v. Sell-Side Research:
Ladies and Gentlemen, I present Barclays Bank on Amylin Pharmaceuticals:
Firm is introducing long term estimates for AMLN from 2011-2020 which assume exenatide LAR approval and launch in the US by 3Q10 and by 3Q11 in Europe. In the US they estimate 2011-2020 exenatide molecule sales of $750M, $1.1B, $1.25B, $1.4B, $1.55B, $1.7B, $1.9B, $2.1B, $2.25B, $2.375B and $2.5B. EPS estimates for 2011-2020 are ($0.43), $0.91, $1.71, $2.24, $2.76, $3.34, $3.84, $4.20, $4.45 and $4.71, respectively.
Yes folks, you read that correctly. Barclays has polished off the crystal ball and is giving us an earnings estimate for AMLN for 2020, 11 years from now. How helpful. And who will be President in 2020? And how will the Yankees be playing in 2017? Will Grey’s Anatomy be picked up for the fall of 2012? Please Mr. Analyst, do tell – will I still have my looks?
Oh, we also get a price target based on 2014 earnings per share and a growth rate estimate into 2017:
Barclays arrives at their new $22 price target by applying a 25x multiple vs 16x multiple previously to 2014 EPS estimate of $2.24 as compared to prior 2012 EPS estimate of $1.70 and discounting at the same 25% discount rate. They believe that 2014 earnings are more representative of aggregate business opportunity for Byetta and exenatide LAR in the US and Europe and that the higher multiple is appropriate given the 35% EPS CAGR estimated for the period of 2012-2017.
Is anyone still shocked that sell-side analysts and their research reports can’t pay for themselves?