I think it is fair to say that year-to-date the performance of the Mayne Pharma Group Ltd (ASX: MYX) share price has been a huge disappointment.
During this time the pharmaceutical company's shares have lost 55% of their value.
Will its shares bounce back soon?
Whilst I'm not overly positive on Mayne Pharma's prospects in the near-term due to the state of the U.S. generic drugs market, one leading broker appears to be a little more bullish.
According to a note out of UBS, the investment bank's analysts have retained their buy rating on the pharmaceutical company's shares.
They have, however, reduced the price target on its shares to $1.03 from $1.55. But despite this sizeable cut, it does still imply potential upside of 67% for its shares over the next 12 months.
UBS has made the cut to its price target after downgrading its earnings estimates for FY 2018 following the company's recent trading update.
But it does see positives from improvements in October and its cost initiatives.
At its AGM management advised that it experienced a 25% increase in net sales and a 50% increase in gross profit in the month of October compared to the monthly average in the first-quarter.
Should you invest?
While I do think that Mayne Pharma looks cheap, there is a danger that things could get worse before they get better.
Because of this, I'm not convinced that the worst is over for the company just yet and would suggest investors hold out for its half-year update next year.
In the meantime, I would sooner invest in healthcare shares such as CSL Limited (ASX: CSL) and Ramsay Health Care Limited (ASX: RHC).
