It may be good advice to not look a gift horse in the mouth, but it's also a pretty good idea to not get overly excited about unreliable financial performance drivers. I'm still generally bullish on Denmark's H. Lundbeck A/S (OTCPK:HLUYY, LUN.CO) (or "Lundbeck"), but my enthusiasm is tempered by revenue beats that are coming largely from declining businesses, difficult marketing environments for key drugs, and a pipeline that may be hard-pressed to drive a lot of near-term pop.
I want to make it clear that I'm
talking about the difference between tapping the brakes and diving out
of the car entirely. I still think Lundbeck is a worthwhile idea as a
long-term holding, but I think the sentiment has shifted from unduly (if
not absurdly) negative a year or so ago to perhaps a little too
positive in the near term. I still believe $38-42 is a reasonable fair
value range for the ADRs, with potential upside from high-risk clinical
programs where the value is presently heavily discounted, but I'm a
little less excited about the near-term outperformance potential from
the core drug business.
Read the full article here:
Lundbeck Continues To Rebuild Its Reputation