PaineWebber on Monsanto & Celebrex (10/16/98)[thanks to Henry Niman]
MONSANTO: 3Q98 EPS IN LINE WITH EXPECTATIONS
Paine Webber
A. Cash,M. Judd
October 16, 1998
PW PW PW PW PW PaineWebber PW PW PW PW PW
Rating=3 (MTC)
Closing Price=$37
Current FY EPS EST=$0.95
Next FY EPS EST=$1.10
FY End=December
10/16/98
KEY POINTS
1. 3Q98 EPS excluding unusual charges was $0.13, which met concensus
expectations. As expected, 3Q98 EPS were greatly bolstered by a Pfizer's
milestone payment for Celebrex ('Celebra') of $140 million
($0.16/share).
2. Monsanto changed Celebra's name to Celebrex, at the FDA's request.
3. Short-term earnings are not particularly important as attention is
focused on Celebrex's expected FDA approval and launch in 1Q99. Our base
case earnings contribution from Celebrex is $0.55 per share by 2001.
4. During the conference call, the company put off answering questions
about future earnings, preferring to address them in Monday's analyst
meeting in New York.
5. As stated in our last note, we expect the stock to recover towards
$40, having over reacted to the AHP breakup.
PaineWebber note on Celebra on Oct. 14
All eyes on Celebra's FDA approval. Our base case earnings
contribution from Celebra is $0.55 per share by 2001. Eyes also on
closure of pending deals, particularly Dekalb, and the financing of
these deals.
PaineWebber pharmaceutical analyst Jeff Chaffkin forecast that
Celebra could achieve sales of $2 billion in the next few years. The
impact to Monsanto earnings could be over $0.50 per share by 2001. These
figures are all very preliminary, assuming $2.50-3.00 cost per day,
certain demand and an assumed competitive performance against Merck's
anticipated launch of Vioxx.
Copied from Henry Niman's website:
paradise-web.com
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