Morgan Stanley is Awaiting Approvals and M&A on Mylan in the Wake of P/E Re-Rating

In a report published Friday, Morgan Stanley analyst David Risinger reiterated an Equal-Weight rating on Mylan MYL. In the report, Morgan Stanley noted, “MYL's multiple has re-rated; we see a balanced risk-reward ahead of NT binary events. MYL shares are currently trading at 16x our 2014E EPS of $3.47. This compares to MYL's mean forward P/E of 10x over the last 3-years. At current valuation, we believe the multiple reflects improved odds of generic Lidoderm and Copaxone launches and potential future M&A. We are maintaining our EW- rating because it is impossible for us to predict future M&A as well as the outcome (and timing) of FDA's decision on Mylan's generic Lidoderm and Copaxone applications with conviction. Our new 12-month base case of $57 is 15x our ‘15E EPS of $3.70 (vs. curr. P/E of 16x on ‘14E).” Mylan closed on Thursday at $56.27.