Par Pharmaceutical Companies, Inc. (PRX) has surprised on the Zacks Consensus Estimate 3 out of the last 4 quarters by an average of 101.93%. With earnings estimates jumping, the company has a PEG ratio of just 0.2.

Company Description

Par Pharmaceutical manufactures generic drugs and branded pharmaceuticals for the specialty markets. The company ranks among the top ten in generic drug sales in the United States.

The branded division, Strativa Pharmaceuticals, was launched in 2005 and has licensed 4 proprietary drugs that are in development.

Third Quarter Zacks Consensus Estimate Rises

As the third quarter earnings report scheduled for Nov 5 approaches, analysts are becoming more bullish on Par.

In just the last week, 3 out of 8 covering analysts have raised estimates by 3 cents to 47 cents per share. That is a 74% increase in the estimate in the last 3 months.

The full year Zacks Consensus Estimate is also jumping. It rose by 7 cents to $2.00 per share in the last week as, again, 3 out of 8 analysts also raised during that period.

Par Pharmaceutical Beat by 35.42% in the Second Quarter

On June 27, Par Pharmaceutical reported second quarter results that easily beat the Zacks Consensus Estimate by 17 cent per share. Earnings per share were 65 cents compared to a loss of 61 cents in the year ago period.

Revenues rose to $404 million from $112.9 million in the year ago period. The company saw strong sales of Metroprol, the authorized generic for all strengths of AstraZeneca’s Toprol XL, which rose 173% from the first quarter due to market exclusivity and additional product supply which boosted volume and price.

As of the end of June, the company had approximately 37 New Drug Applications pending with the FDA, 14 of which Par believed to be first-to-file and/or first-to-market opportunities with a brand value of about $5.9 billion.

Value Fundamentals

Par Pharmaceutical is a Zacks #1 Rank (strong buy) stock. It has attractive value characteristics with a forward P/E of 11.9 and a price-to-book of 1.81. The company also has a solid 1-year return on equity (ROE) of 12.66%.

Zacks Investment Research
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