Deutsche Bank Views Allergan As A Best-In-Class Specialty Pharma Company; Initiates Buy


In a research report published today, Deutsche Bank analyst Gregg Gilbert initiated coverage on shares of Allergan (NYSE:AGN) with a Buy rating and a $215 price, which represents a potential upside of 14% from where the stock is currently trading.

Gilbert noted, “We view AGN as a best-in-class Specialty Pharma company, with an attractive combination of strong and sustainable organic growth, robust balance sheet, and interesting pipeline opportunities. We see routes to upside based on (1) a smart acquisition by AGN, (2) an acquisition of AGN by VRX, at current or improved offer terms, or (3) an acquisition of AGN by another company. AGN has a robust balance sheet and significant borrowing capacity to support a meaningful strategic acquisition, which is not reflected in our $215 target.”

The analyst continued, “VRX has been working to acquire AGN for much of ‘14, and we see the saga heating up ahead of the special meeting on 12/18 where shareholders (of record on 10/30) will vote on removing six of AGN’s nine directors. While the current offer value (~$175) does not suggest upside, we would expect VRX shares to appreciate (boosting AGN shares) if the likelihood of completing the deal increases. Meanwhile, AGN is actively working on opportunities that may offer investors a compelling alternative to the VRX offer.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gregg Gilbert has a total average return of 22.1% and a 68.2% success rate. Gilbert is ranked #271 out of 3319 analysts.

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