Citi Maintains Buy on Endo Pharmaceuticals Holdings

Citi is out with its report today on Endo Pharmaceuticals Holdings ENDP, maintaining Buy. In a note to clients, Citi writes, "We rate the shares of Endo as Buy/High Risk (1H). We expect Lidoderm and the Opana/Opana ER franchise to continue to generate material cash flows for several years beyond their genericization period and believe that the market is discounting the revenue generation potential of especially Lidoderm post genericization too heavily. We see potential upside for the stock based on Endo's: (1) entrepreneurial management team that has business development experience, (2) the strategy of broadening the company's therapeutic footprint from legacy pain management into specialty 'procedural' driven areas including urology & gynecology with a focus on treating endocrine and oncology sub-segments, and (3) strong cash flows from the company's pain management franchises that are anticipated to be deployed toward targeted near-term revenue generating in-licensing opportunities or acquisitions." Citi maintains a $48 PT on ENDP. Shares of ENDP closed Friday at $41.52, up 1.57% from Thursday's close.