RBC starts Paladin at “outperform”

RBC Capital Markets has initiated coverage of Paladin Labs (TSX: PLB) with an “outperform” rating and 12-month price target of $23.  The stock finished trading at $18 on Friday.

“What we find compelling about the story is the company’s unique strategy with a particular focus on free cash flow generation and growth in a conservative but opportunistic manner,” writes analyst Doug Miehm.

He also points to “several items that could further supplement our valuation and, if these events were to occur in aggregate, our target could climb to $30-to-$35.”

Among additional drivers, he cites the potential to continue meaningful in-licensing and/or product acquisitions, announcements of various regulatory milestones and investor recognition of the company’s ability to generate forecasted free cash flow.