Blink Charging Co.

BLNK Details

Strategic Master Development and Production Agreement with SG Blocks: Blink Charging Co. (NASDAQ: BLNK) is a leader in electric vehicle (EV) charging equipment. As on 21 October 2020, the market capitalization of the company stood at ~US$272.07 million. The company has recently entered an exclusive Master Development and Production Agreement with SG Blocks, Inc., under which Blink’s EV charging solutions will be deployed along with SG Blocks’ container-based modular building structures to provide off-grid charging solutions through combined solar and battery components in multiple capacities. This agreement will increase the geographic footprint of BLNK and will support the increasing number of electric vehicles and the need for increased charging locations.

EV Charging Stations in The Elysian: The company has recently announced the installation of 40 Level 2 EV charging stations at The Elysian residential building in California to support the rapidly increasing number of electric vehicles in the city.

Quarterly Financial Highlights (For the Period Ended 30 June 2020): During the second quarter ended 30 June 2020, the company reported a record revenue of US$1.6 million compared to US$0.7 million in the second quarter of 2019. This was driven by an increase in product sales and increased demand for the Company’s products and services. However, the company saw an increase in a net loss to US$3 million, up from a net loss of US$2.2 million in the second quarter of 2019.

Q2 FY20 Results (Source: Company Reports)

Stock Recommendation: The company has entered some significant partnerships and is working on expanding its international footprint. The stock of BLNK is inclined to its 52-weeks’ high level of US$14.58 and retains limited potential for further growth. The stock of BLNK gave a return of 23.13% in the past three months and a return of 7.79% in the last one month. On a technical front, the stock of BLNK has a support level of ~US$8.11 and a resistance level of ~US$11.49. On a TTM basis, the stock of BLNK is trading at an EV/Sales multiple of 42.9x, higher than the industry average of 16.6x, and thus seems overvalued. Considering the current trading levels, volatility in returns in the past three months, and softer market conditions, we suggest investors to wait for better entry levels and give an ‘Expensive’ rating on the stock at the closing price of US$8.57, down by 7.15% on 21 October 2020.

BLNK Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

AbbVie Inc.

ABBV Details

AbbVie Submits Regulatory Applications to FDA and EMA for RINVOQ™: AbbVie Inc (NYSE: ABBV) is a healthcare company that is engaged in the discovery and delivery of innovative medicines that solve serious health issues and address the medical challenges. As on 21 October 2020, the market capitalization of the company stood at ~US$146.28 billion. The company has recently submitted applications to the U.S. Food and Drug Administration and European Medicines Agency seeking approval for RINVOQ™ for the treatment of atopic dermatitis in adults and adolescents. The application is supported by the Phase 3 studies, wherein it demonstrated improvement in skin clearance and reduction in itch.  

FDA Full Approval for Acute Myeloid Leukemia: The company has recently received full approval from the US FDA for VENCLEXTA® in combination with azacitidine, or decitabine, or low-dose cytarabine for the treatment of newly-diagnosed acute myeloid leukemia in adults.

Quarterly Financial Highlights (For the quarter ended June 30, 2020): Despite the global pandemic, the company has delivered a decent quarterly performance with an increase of 26.3% in revenue to $10.425 billion. On a GAAP basis, the gross margin ratio in the second quarter was 64.4% and the operating margin was 7.2%. In the same time span, the company reported a diluted EPS loss of US$0.46.

Quarterly Financial Highlights (Source: Company Reports)

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation (Illustrative)

EV/EBITDA Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The company has provided guidance for full-year FY20 and expects EPS in the range of US$4.12 to US$4.22. The company expects to release its Q3 FY20 results on 30 October 2020. The company has also completed its acquisition of Allergan, which will expand and diversify its revenue base with new therapeutic areas. The stock of ABBV gave a return of 1.69% in the past six months but a negative return of 7.00% in the past one month. On a technical front, the stock of ABBV has a support level of ~US$80.71 and a resistance level of ~US$91.87. We have valued the stock using the EV/EBITDA multiple based illustrative relative valuation method and have arrived at a target price offering an upside of lower double-digit (in percentage terms). For the said purposes, we have considered Merck & Co Inc (NYSE: MRK), Bristol-Myers Squibb Co (NYSE: BMY), Amgen Inc (NASDAQ: AMGN), etc., as peers. Considering the current trading levels, decent returns in the past three months, guidance for full-year and acquisition of Allergen, we recommend a ‘Buy’ rating on the stock at the closing price of US$82.89, down by 1.61% on 21 October 2020.

ABBV Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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