Duncan-Williams is maintaining its Hold rating on shares of Cumberland Pharmaceuticals, Inc. CPIX.
“Our valuation is now primarily based on a DCF analysis,” Duncan-Williams writes. “We use a WACC of 14% with a terminal growth rate of 0% to arrive at a hypothetical estimate of $6.00 (after adjusting our discount period).
“If we were to compare Cumberland with other specialty pharmaceutical companies we would apply a multiple of 12x (in line with the group) to 2012 consensus EPS of $0.36 to derive a hypothetical price target of $4.30.”
Cumberland Pharmaceuticals closed Tuesday at $5.72.
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