My weekly stock analysis: a look under the hood of Canadian and the US stocks.
the analysis also appears on the following newspaper
Jan 20, 2017
Eli Lilly & Co （NY） 医药巨头、不断研发，长线持有
Eli Lilly & Co（NY）是全球知名的大型医药研发公司，股价在2016 下跌了近15%，在2016年11 月突然宣布一款其一直开发的旨在缓解老年痴呆症的新药（solanezumab）在临床阶段的药效并不明显，公司将放弃将这款药作为针对老年痴呆症的药来继续研发，这让其股价在消息宣布当天重挫。
不过Eli Lilly绝对不是只有一两个新药的小公司。公司除了研发抗老年痴呆症的新药之外，还在研发其它领域超过20款的新药，用于治疗癌症、糖尿病、银屑病（牛皮癣）和类风湿关节炎等自身免疫性疾病。这些新药将给公司每年带来几十亿美元的销售额。股价现在低于历史平均价位13% 左右，每股派息3%。长线Eli Lilly将每年有平均5% 的营业额增加。
在2016年12月中， 公司公布了2017年业绩展望：全年公司的营业额将在218亿美元到223亿美元，每股预计盈利$4.05 至$4.15美元。这一预计远超市场分析员的预期。当然，如果和整个医药制药行业平均价格相比，Eli Lilly 的股价高出20%。新一届美国政府可能也会处于政治考虑，对包括Eli Lilly在内的整个制药行业的产品定价施加更大压力（尤其是糖尿病产品的定价将会受到来自美国政府的较大政治压力），除此之外， Eli Lilly宜以长线持有。
Eli Lilly & Co, the U.S. pharmaceutical giant saw its stock fallen 15% in 2016, including its sharpest one-day decline for shares in eight years – in November 2016, after it reported a late-stage failure of an experimental Alzheimer’s drug. The study was a risky and costly bet for Lilly because two prior studies of the drug also had mostly negative results. The company will book a fourth-quarter charge of about $150 million in connection with the study’s failure. However, this is more of a temporary setback than anything else. Just a few weeks after the announcement of the failure of solanezumab, Eli Lilly offered an upbeat outlook for 2017, forecasting revenue and per share profit growth well above Wall Street’s expectations. The Indianapolis-based pharmaceutical company expects adjusted earnings between $4.05 and $4.15 a share on revenue of $21.8 billion to $22.3 billion, well above analysts’ forecasts for earnings of $3.97 a share on $21.67 billion, according to Thomson Reuters. Lilly said the new estimates signal mid-single-digit growth from the current year, boosted by increased volume from new products. Lilly also projected an increase in gross margin as a percent of revenue.
Overall, Lilly is far more than a play on the high-risk, high-reward Alzheimer’s drug market. The company says that in the decade-long period ending in 2023, it plans to launch at least 20 new drugs. Analysts expect billions in annual sales to come from drugs that treat cancer, diabetes and autoimmune diseases such as psoriasis and rheumatoid arthritis. Of the 20 drugs Lilly says it will launch between 2014 and 2023, seven have already hit the market, and one, a drug for rheumatoid arthritis, is under regulatory review at the U.S. FDA. Credit Suisse analyst Vamil Divan calls the company “an industry leading longer term growth story.” It also has an attractive dividend – near 3%. And at 17 times projected 2017 earnings per share the stock trades 13% below its historical average. Lilly stands by long-term forecasts for better than 5% average annual revenue growth over the remainder of the decade, operating expenses of 50% or less of revenue by 2018 and annual dividend hikes.
Granted, Lilly fetches a 20% premium to the broader industry. And like other drug makers, it faces political pressure on drug prices, particularly price hikes for diabetes drugs. But with margins and sales rising thanks to new drugs, Lilly is worth a shot.
The commentaries in the article only represent author’s own personal opinion. They should not be relied upon for the purposes of effecting your personal investment strategies, nor they can be construed as an offer or investment advice to buy or sell any securities. Before implementing investment decision, you should first assess your personal risk tolerance and consult a professional investment advisor.
This week’s pick: DIS (disney)
1923年10月迪斯尼两兄弟成立了一家小动画制作公司。近百年之后，迪斯尼已经是具有全球影响力的娱乐影视巨头，拥有以其冠名的主题公园、度假村、有线电视、纪念品制作销售和电影工厂，其年度营业额超500亿美元。其中影视拍摄制作颇为成功，年度销售额大增22％，而主题公园和度假领域年度也稳步增长了4％。金融分析员普遍认为迪斯尼在今年财政年度结束之前可以实现美股盈利$5.83美元。而下个财政年度美股盈利将升至美股$6.24美元。不过公司同时也面临一些挑战：首先是要寻找新的CEO来顶替即将卸任的现任CEO Robert Iger, 但一直无合适人选。久拖不决对公司长远发展不利。另外迪斯尼旗下的ESPN体育频道和有关电视节目面临来自互联网下载或同步观看所带来观众分流，相关利润一直在减少。目前股价在$98-$100徘徊，短期内（1-3个月）估计不会有太大波动。分析员目前预计明年迪斯尼股价还会上升一截，平均预估涨至$115.
Disney brothers formed a small cartoon studio back in Oct 1923. That was then, now Disney’s entertainment is an empire with annual revenue exceeding $50 billion. It includes theme parks and resorts, cable and network television, consumer merchandise and a film studio. Its movie studio is a massive success, which grew revenue 22% year over year. Its parks and resorts also posted 4% revenue growth on annual basis. Per share profit, meanwhile, continues to rise. Analysts surveyed by Thomson Reuters see Disney earning $5.83 during the current fiscal year that ends in September, up 13% from last year, and rising another 7% to $6.24 next year. In fact, the strength of its movie studio and Disney’s ability to monetize its expanding universe of iconic film characters is just one reason that analyst community continue to like its stock with median price target of $115.
Disney still has to deal with some headwinds: there is still no succession plan for retiring CEO Robert Iger. Its television and cable business, in particular its prized ESPN sport network, are being challenged by new technology and so-called cord-cutting. And Walt Disney Studios needs to keep making the hits if it hopes to come close to last year’s record-setting box office record.
Still, with attractive profit growth and an enticing valuation, Disney stock remains a buy in long term. Short term within next quarter, the stock is not expected to move higher than what it is now at about $100.
Disclaimer: Mr. Yang’s commentaries, trading ideas and model trades represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Yang’s opinions as constituting investment advice. Neither the publishers nor Mr. Yang claims to have any non-public information regarding the companies mentioned in this site.