Deutsche Bank Downgrades Akorn (AKRX) to Hold
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Deutsche Bank downgraded Akorn (NASDAQ: AKRX) from Buy to Hold with a price target of $33. Analyst Gregg Gilbert said launches will be key in the second half of the year.
"While we see upside based on potential approvals and deals over the next year, this upside potential is somewhat balanced by the increasing competitive intensity in the US generic space. AKRX’s interesting and diverse portfolio of specialized dosage forms has enabled the company to weather rocky times better than some other small/medium-sized US generic players. But with the stock having made a nice recovery from its 3/21 bottom, which was in large part tied to the SEC filing delays and de-listing risk, we are less comfortable recommending the stock at this price on the premise that new products and deals will significantly overwhelm the effects of an increasingly competitive market," said Gilbert.
"We continue to believe that management is shareholder friendly and is doing the right things to position AKRX for long-term value creation. An underlevered balance sheet creates some optionality as well. Many investors (and we) see AKRX as an attractive asset in an ever-consolidating environment, although much of the generic M&A in recent times has been done in the smaller size range (vs. AKRX’s enterprise value of ~$4.6bn)," added the analyst.
Shares of Akorn closed at $31.24 yesterday.
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