Thursday, August 9, 2018

After A Wild Party, Lundbeck Wakes To A Nasty Hangover

I would argue that the reaction to H. Lundbeck’s (OTCPK:HLUYY) (LUN.CO) second quarter earnings highlights just how big of a role momentum and expectations, reasonable or otherwise, play in stock valuations. Lundbeck’s quarter wasn’t pristine, but it was a beat-and-raise quarter, but it wasn’t on pace with the recent beat-and-raise trend and it’s clear that the strong cost-cutting tailwinds that pushed Lundbeck along so strongly are now going to crash into the realities of serious patent/generic revenue drop-offs.

I probably got a little greedy holding on to Lundbeck, but I was pretty much playing with house money and I don’t really have too many regrets. I believe Lundbeck is on a good trajectory, and the company has added multiple compounds to its pipeline recently, but it is likely going to take some meaningful good news from the clinic to get excitement going again in these shares, as I think the party is over for the run of beat-and-raise quarters fueled by the prior administration’s cost cuts.

Read more here:
After A Wild Party, Lundbeck Wakes To A Nasty Hangover

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