Global Index Briefing: World Biotechnology Industry MSCI January 19, 218 Dr. Ed Yardeni 516-972-7683 eyardeni@ Joe Abbott 732-497-536 jabbott@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents World Biotechnology Industry MSCI Stock Price Index 1 Earnings 2 Revenues & Margins 3 Valuation 4-7 January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
Stock Price Index 12 185 9 785 Figure 1. WORLD BIOTECHNOLOGY INDUSTRY MSCI STOCK PRICE INDEX (ratio scale) 1/19 12 185 9 785 6 6 485 485 3 3 185 185 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219 2-day moving average. Source: MSCI. 19 Figure 2. WORLD BIOTECHNOLOGY INDUSTRY MSCI FORWARD EARNINGS, & VALUATION 19 17 15 13 World Biotechnology Industry MSCI Index 1/19/18 Blue Angels Implied Price Index* /18 x x25 17 15 13 11 11 9 9 7 x15 7 5 5 3 3 1 27 28 29 21 211 212 213 214 215 216 217 218 219 1 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 25, weekly thereafter. Source: MSCI and Thomson Reuters I/B/E/S. Page 1 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
Earnings 65 6 55 5 Figure 3. WORLD BIOTECHNOLOGY INDUSTRY MSCI EARNINGS PER SHARE (analysts average forecasts) Consensus Forecasts Annual estimates Forward earnings* 17 18 19 65 6 55 5 4 4 3 3 25 25 2 2 15 15 1 1 5 5-5 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219-5 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 25, then weekly. 3 Figure 4. WORLD BIOTECHNOLOGY INDUSTRY MSCI INDEX NET EARNINGS REVISIONS* 3 2 2 1 1 Dec -1-1 -2-3 NERI Oct 3.78 Nov -4.91 Dec -6.41 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219-2 -3 * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Page 2 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
165 15 1 12 Figure 5. Revenues & Margins WORLD BIOTECHNOLOGY INDUSTRY MSCI REVENUES PER SHARE (analysts average forecasts, ratio scale) 17 18 19 165 15 1 12 15 15 9 9 75 75 6 6 3 Consensus Forecasts Annual estimates Forward revenues* 3 15 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219 15 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 25, then weekly. Figure 6. WORLD BIOTECHNOLOGY INDUSTRY MSCI PROFIT MARGIN (using analysts average earnings and revenues forecasts) 4 Consensus Forecasts Annual estimates Forward profit margin* (34.5) 17 18 19 4 3 3 25 25 2 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219 2 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 25, weekly thereafter. Page 3 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
9 8 7 Valuation Figure 7. WORLD BIOTECHNOLOGY INDUSTRY MSCI VALUATION MULTIPLE* Forward P/E (16.4) 9 8 7 6 6 5 5 4 4 3 3 2 1 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219 2 1 * Price divided by forward consensus expected earnings per share. Monthly data through December 25, weekly thereafter. 3.5 Figure 8. WORLD BIOTECHNOLOGY INDUSTRY MSCI RELATIVE VALUATION* 3.5 3. Relative P/E (1.) 3. 2.5 2.5 2. 2. 1.5 1.5 1. 1..5.5. 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 219. * Forward P/E of index relative to All Country World MSCI forward P/E. Monthly data through December 25, weekly thereafter. Page 4 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
Valuation 4 Figure 9. MSCI INDUSTRIES PRICE INDEX* SELECTED COUNTRIES & REGIONS (weekly, indexed to at 12-31-28) 4 3 25 Biotechnology Europe (423.2) Switzerland (363.8) United States (321.8) 3 25 2 2 15 15 1 1 5 5-5 -5-1 29 21 211 212 213 214 215 216 217 218 219-1 * All MSCI regions in US$ except EMU in euros. All MSCI countries in local currency except Peru and Russia in US$. 8 75 7 65 6 55 5 4 3 25 2 15 1 5-5 -1-15 Figure 1. MSCI INDUSTRIES FORWARD EARNINGS* SELECTED COUNTRIES & REGIONS (weekly, indexed to at 1-16-26) Biotechnology EMU (469.2) Switzerland (323.3) United States (629.3) Forward Earnings capped at -1 due to extreme values. 6 7 8 9 1 11 12 13 14 15 16 17 18 19 8 75 7 65 6 55 5 4 3 25 2 15 1 5-5 -1-15 * Price divided by 12-month forward consensus expected operating earnings per share. Monthly through December 25, weekly thereafter. Page 5 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
Valuation 6 55 Figure 11. MSCI INDUSTRIES FORWARD REVENUES* SELECTED COUNTRIES & REGIONS (weekly, indexed to at 1-16-26) 6 55 5 4 Biotechnology EMU (561.1) Switzerland (84.8) United States (413.4) 5 4 3 3 25 25 2 2 15 15 1 1 5 5-5 -5-1 -15 6 7 8 9 1 11 12 13 14 15 16 17 18 19-1 -15 * Price divided by 12-month forward consensus expected operating earnings per share. Monthly through December 25, weekly thereafter. 5 4 3 Figure 12. MSCI INDUSTRIES FORWARD PROFIT MARGIN* SELECTED COUNTRIES & REGIONS (percent) Biotechnology EMU (1.3) Switzerland (.8) United States (36.4) 5 4 3 2 2 1 1-1 Forward Profit Margin capped at -5% due to extreme values. 6 7 8 9 1 11 12 13 14 15 16 17 18 19-1 * Price divided by 12-month forward consensus expected operating earnings per share. Monthly through December 25, weekly thereafter. Page 6 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
5 Figure 13. Valuation MSCI INDUSTRIES FORWARD P/E* SELECTED COUNTRIES & REGIONS 5 4 P/E capped at 4 due to extreme values. 4 3 Biotechnology EMU (24.2) Switzerland (32.6) United States (16.1) 3 2 2 1 1 6 7 8 9 1 11 12 13 14 15 16 17 18 19 * Price divided by 12-month forward consensus expected operating earnings per share. Monthly through December 25, weekly thereafter. Page 7 / January 19, 218 / Global Index Briefing: World Biotechnology Industry MSCI www.
Copyright (c) 218. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on www., blog., http://blog. and YRI s Apps for ipads and iphones are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed on any product, service, report, email or website are proprietary to and constitute valuable intellectual property. No material from any part of www., blog., http://blog. and YRI s Apps for ipads and iphones may be downloaded, transmitted, broadcast, transferred, assigned, reproduced or in any other way used or otherwise disseminated in any form to any person or entity, without the explicit written consent of All unauthorized reproduction or other use of material from Yardeni Research, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Yardeni Research, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights. The recipient should check any email and any attachments for the presence of viruses. accepts no liability for any damage caused by any virus transmitted by this company s emails, website, blog and Apps. Additional information available on request. requests@