UPDATE: Bank of America Initiates Mallinckrodt with Buy on Brand Launch Potential

In a report published Wednesday, Bank of America analyst Gregg Gilbert initiated coverage on

with a Buy rating and $52.00 price target. In the report, Bank of America noted, “MNK markets brand and generic pain products, APIs and imaging agents. Sales, margins and EPS will be pressured over the next year or so as key products face competition and MNK invests ahead of key launches, but we see potential for a multi-year margin and EPS growth story if the brand launches deliver. Management expects the stand-alone company to be more active in business development, and we see MNK's strength in controlled substances and its Irish domicile as attractive factors in a consolidating environment. We view Imaging (~42% of revs) as less core longer term. The stock may be volatile for some time as COV investors decide what to do with their MNK shares.” Mallinckrodt plc closed on Tuesday at $42.26.