Jefferies raises the price of Laboratorios Rovi to 100.50 euros: "We see many advantages"

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Jefferies has improved the Laborotorios Rovi target price at 100.50 euros per share from the previous 66 euros, and have reiterated their recommendation of 'buy' the value in the middle of the good EXPECTATIVES from strategists about the company and the «many advantages» it offers. And they consider positive that the pharmaceutical company is considering sale of a majority stake in its third-party manufacturing business, in which several investment funds such as KKR, Pai Partners, Permira, Advent International or TA Associates have been interested. «Rovi is one of the few public companies that has significant fill/finish capabilities for external customers, so given Novo's $11 billion acquisition of CTLT's fill/finish facilities, we can understand why Rovi is considering ways to unlock value«, the analysts have explained. In this sense, they consider «a possible sale of division through compensation; how external investment could unlock value and accelerate growth given the Rovi's conservative stance on debt; what is implicit in the actions of the segment», they add. Likewise, the recent approval of Risvan by the American FDA for the treatment of schizophrenia in adults «validates the ISM platform» and the announcement of any partner could act as a catalyst for the company. During the presentation of its results, Rovi has reiterated its orientation for the year as a whole, but Jefferies sees advantages when considering that «excludes possible bullish drivers» such as the «limited visibility in the Covid campaign and the expansion of CDMO capacity, which may generate new customers.» «We believe that business can double EBITDA by 2027 driven by the CDMO business and royalties from Risvan,» they conclude in Jefferies.