MSB 1.02% $4.96 mesoblast limited

Tracking Valuations

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    Ensure you Do Your Own Research and make your own decisions.
    There are no specific recommendations to buy or sell.


    A thread for tracking valuations. It's important that you read the linked posts for full context.

    Please keep the thread on-topic.

    It's important that you research the fundamentals of the stock for yourself. Some useful links for this:​
    30/04/20
    Post #:44337865
    @ecoool2

    [ read full post for context - https://hotcopper.com.au/threads/msb-trading-2020.5158541/page-6876?post_id=44337865#.Xqvdb1MzZBw ]

    IFF Covid19 ARDS becomes a successful product, the potential share price is $200-300 rather than my current forecast of up to $20.

    28/04/20
    Post #: 44311537
    @wombat777
    Best to read the post - note - price at posting was $3.24
    https://hotcopper.com.au/threads/valuation-musings.5365936/#.XqvallMzZBw

    24/04/20
    Post #: 44231881
    @
    ecoool2
    [read full post for context - https://hotcopper.com.au/threads/msb-trading-2020.5158541/page-6238?post_id=44231881#.XqvX8lMzZBw ]

    The potential numbers of a successful cure are astronomical for MSB and you can mount an argument that the company could be worth $A200 to $A300 per share. This is way above my current thinking - and the trial has not even started yet.

    I would think a price of $A5 per MSB share is possible in the near term. This is still below the average analyst price guide and I note that those analysts use very low probabilities of success for major prodcust (only 25-30% probabilities for back pain and heart products).

    A quick approval for Covid-19 would probably see those valuations increase dramatically (ie they could multiply by 3-4x for the major product candidates) and the discount rate used would probably also be reduced. An increase in the price targets to $A10-$A20 per MSB share would therefore be fairly easily done - just change the probability discounts! And that's before you include anything for Covid-19.


    09/04/20
    Post #:43968058
    @ecool2

    [read full post for context - https://hotcopper.com.au/threads/msb-trading-2020.5158541/page-4941?post_id=43968058#.Xqvj7VMzZBw ]

    Analysts already have a $A5.20 average price target, before you include anything for Covid-19 ARDS. If this works, I expect the valuations to go up by multiples of $A5.25!

    ...

    Despite having nothing in their models for Covid-19 ARDS, analysts who cover the stock in the US have an average price target of over $A5.20 equivalent per Australian MSB share (and I only include those who have updated their research in the past 6 months since the Grunenthal partnering deal for chronic lower back pain in Europe and LatAm AND since the last capital raising which secured the balance sheet and cash burn out until next year).

    The increase in market cap from the two announcements this week is nothing compared with the potential upside. Even if the Covid-19 ARDS trial doesn't work, the analysts' price target is over $A5.20.

    07/04/20
    Post #:43915951
    @ecoool2

    [ read full post for context - https://hotcopper.com.au/threads/msb-trading-2020.5158541/page-4640?post_id=43915951#.XqveQFMzZBw ]

    14. Analyst price targets and valuations PRE COVID-19

    I only consider analysts who have either updated their research in the past 6 months, and since the Grunenthal deal and capital raisings in October last year.

    a) Bell Potter valuation is $A5.15

    b) Dawson James price target is $US15 per MESO share (equivalent to $A5.00 per MSB share)
    DJ use a swingeing discount rate of 30%, saying "A higher risk rate of 30% is applied (vs. 15% or 10%) since Mesoblast is a microcap company with drug candidates in clinical trials that have yet to gain FDA approval." So when Mesoblast finishes its phase 3 trials successfully, and are no longer a microcap, I presume DJ will drop the discount rate, and this will see a huge rise in the price forecast.

    c) Cantor FitzGerald $US23 per MESO share (equivalent to $A7.67 per MSB share)

    d) HC wainwright $US14 per MESO (ie $A4.67 per MSB share)

    e) Maxim $US16 per MESO share (ie $A5.33 per MSB share)

    f) Ladenburg Thalman $US10.50 per MESO share ($A3.50 per MSB share)

    g) Edison $A7.53 per MSBshare


    11/02/20
    Post #:42873553
    @ecoool2

    [ read full post for context - https://hotcopper.com.au/threads/msb-trading-2020.5158541/page-2051?post_id=42873553#.XqvkGVMzZBw ]

    5. Analyst revisions jump to big positive in January

    As I have pointed out several times, analysts 12-month price targets are based on very conservative assumptions, and they are subject to upgrades as MSB's "certainty" improves and the share price rises. Thus, it is likely to be a long time before the share price catches up to the analysts' recommendations.
    Last week, HC Wainwright increased their 12-month target price from $US8 to $US14 per MESO share ($A4.18). That follows recent upgrades from Bell Potter and Edison who are at $A5.15 and $A7.91 (before diluting for options).

    Shorts ca n pick on individual analysts and their track records all they like - the upgrade trend remains for the 5 US analysts who have reviewed their research since October when the Grünenthal deal and placement took place. Those 5 analysts now have a consensus 12-month price target of $US15.40 ($A4.60) - and this is likely to keep rising in my humble opinion.

    The 4 analysts covering MSB in the Nasdaq survey has a slightly lower average of $US15.25, but they include Chardan Capital, who haven't updated their numbers since August, ie before the company changing Grünenthal announcement and the placement (and Chardan have a very low target of only $US6, which is likely to be increased when they update their numbers). Nevertheless, you can see the big increase in the share price targets in the past month, and t

    he other 3 analysts (Cantor, Edison and Wainwright) have an average price target of $US21.16, or $A6.30 per MSB share).
    (see: www.nasdaq.com/market-activity/stocks/meso/analyst-research).

    I personally like to look at the analysts who keep their numbers updated and who have forecasts more recent than last October, but here's the graph that US investors see when they search the Nasdaq site - no wonder they've been buying!


    Screen Shot 2020-05-01 at 6.47.18 pm.png



    24/10/2019
    Edison Investment Research (pre-COVID)

    https://www.edisongroup.com/wp-content/uploads/2019/10/Mesoblast-Increasingly-positive-on-aGvHD.pdf

    Valuation: A$4.1bn or A$7.56 per share We have materially revised our valuation to A$4.1bn or A$7.56 per share (A$7.20 per diluted share) from A$1.72bn or A$4.02 per share. This increase was driven by a revised assessment of the aGvHD paediatric and adult opportunities in North America and in Europe. We also include LVAD use in HF and added value to the programme. We have also increased our price assumption of MPC therapy in lower back pain. These changes were partially offset by decreasing the probability of success of paused projects to 5% (from 10%). We also rolled our estimates forward.
    Last edited by wombat777: 01/05/20
 
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