Less than a week after its most recent update on GW Pharmaceuticals plc GWPH, Cantor Fitzgerald lowered its price target for the stock Monday after the issuance of the company's 10-K report.
The Analyst
Analyst Elemer Piros reiterated an Overweight on GW Pharmaceuticals and lowered the price target from $211 to $193.
The Thesis
Cantor has adjusted its model based on GW Pharma's full-year results, Piros said in the note. (See his track record here.)
The analyst reduced his valuation model, taking into account the dilution from the company's $345-million stock offering as well as higher general and administrative spending.
Even with the lower price target, Piros still sees 57-percent upside potential in the stock and remains bullish on the company.
The main catalyst for GW Pharma will be Epidiolex sales, the analyst said, adding that they should take off after the holidays in the first quarter of 2019.
Cantor's model includes a 2019 sales estimate of $170 million in the U.S. and EU. The sell-side firm estimates that GW Pharmaceuticals will burn $156 million in cash over the next 12 months.
The updated model adjusts the NPV for Epidiolex from $5.1 billion to $4.9 billion, taking into account the UK tax rate of 21 percent and a 15-percent discount. Cantor added $500 million for the drug portfolio and $523 million in cash at the end of Q4 2019.
Price Action
GW Pharma shares were up 1.88 percent at $125.33 at the time of publication Monday.
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