Barclays Downgrades Endo On 'Difficult Path'

Barclays has downgraded Endo International plc ENDP from Equal-Weight to Underweight with a price target of $2, down from $5, on a 'difficult path.' 

• The analyst Balaji Prasad sees three headwinds for the company in 2022: lowered confidence on Qwo, weaker Xiaflex growth, consensus estimates moving lower materially following the Q1 Vaso guidance of down 30% Y/Y. 
• Prasad expects estimates to move closer to his 50% decline expectation. When combined with the opioid litigation overhang and "limited positives insight," Prasad sees a "difficult path for the stock to perform."
• The company reported Q4 FY21 sales of $789.4 million, +4% Y/Y, better than the consensus of $731.4 million.
• Adjusted EPS $0.84 compared to $0.75 in Q4 FY20, beating the consensus of $0.67.
• Endo forecasted Q1 FY22 sales of $595 million - $635 million, lower than the consensus of $685.47 million.
• The company expects adjusted EPS of $0.35 - $0.45, compared to the consensus of $0.48.
• Piper Sandler also reduced the price target on Endo to $3 from $5, with an unchanged Neutral rating.
• Price Action: ENDP shares are down 5.19% at $2.29 during the market session on the last check Wednesday.