Apotex IPO Shares Jump 44%; Analysts See 24% More Upside
The Canadian generic drugmaker has 25% domestic market share and unanimous buy ratings. Average price target of $40.25 implies further gains.
Shares of Apotex (APTX:TSX) closed Monday at $34.62, up roughly 44% from the June IPO price of $24. Every one of the 12 analysts covering the stock rates it a buy, according to Bloomberg data. Their average 12-month target is $40.25, implying another 24% gain from Monday's close. Targets range from $36 at Raymond James Ltd. to $43 at RBC Capital Markets, with BMO Capital Markets at $39 and National Bank Capital Markets at $36.
TD Cowen analyst Michael Nedelcovych initiated coverage with a buy rating and a $40 target. Apotex holds nearly a quarter of the Canadian generics market, a share that Nedelcovych said "hedges against competition" in a note to clients. The company exports to 70 countries and operates in Canada, the United States, Mexico and India.
Lead underwriters for the IPO included TD Securities Inc., RBC Capital Markets and Bank of Nova Scotia. Both RBC and BNS carry Alpha Scores of 52 and 56, respectively, placing them in the "mixed" to "moderate" range on AlphaScala's proprietary scale. Investors tracking the names can find full profiles at the RBC stock page and BNS stock page.
Apotex began trading on the S&P/TSX composite index on June 9. The unanimous buy consensus and wide analyst support reflect the market's confidence in the company's dominant position, though at $34.62 the stock has already absorbed much of the expected first-year gain.
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