Echelon Wealth Partners analyst Doug Loe is sticking to his guns on Theratechnologies (TSX:TH).
Analysts from Echelon have been rolling out their top picks this week, and, just like last year, Theratech has made the grade with Loe.
In a research update to clients today, Loe maintained his “Buy” rating and one-year price target of $10.00 on Theratechnologies, implying a return of 24 per cent at the time of publication.
Loe says he expects the good times will continue to roll for Theratechnologies.
“TH was one of our Top Picks in 2017 as well, during which it generated cumulative return of 162% and at current price level (the stock is up 12% already this year), TH is up 1,650% since Oct/14 when we singularly among our peers upgraded TH to a BUY (well, a Speculative BUY at the time),” the analyst notes. “Our diligence at that time was focused on rejuvenated economics we projected for FDA-approved HIV lipodystrophy-targeted stabilized growth hormone-releasing hormone (GHRH) peptide drug Egrifta, economics that did in fact lead to aggressive US sales ramp in F2015/16 commensurate with TH share price strength achieved in parallel.”
Loe thinks Theratech will generate EBITDA of negative $5.6-million on revenue of $42.4-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $4.4-million on a topline of $66.4-million the following year.
Loe says he expects strong free cash flow support from U.S. sales of Egrifta to continue, but points out that the blue sky in his investment thesis still comes from ibalizumab, for which US approval in the second quarter of 2018 and US launch in the following quarter are still expected.