Deutsche Bank Upgrades Akorn (AKRX) to Buy; Sell-Off Overdone, Says Analyst

November 7, 2016 1:46 PM EST
Get Alerts AKRX Hot Sheet
Price: $20.52 -0.44%

Rating Summary:
    12 Buy, 7 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Deutsche Bank upgraded Akorn (NASDAQ: AKRX) from Hold to Buy with a price target of $28. Analyst Gregg Gilbert said its sell-off was overdone.

"AKRX shares are down 20% since 11/3, when the company reported 3Q results and news emerged about a DOJ investigation into suspected price collusion involving generic companies that could result in charges by year-end. The quarter itself was decent, although AKRX announced that FDA clearance of its Decatur injectables facility will require a re inspection, the timing of which is uncertain. Unlike other generic stocks, AKRX shares have not begun to recover since 11/3, which we believe could be tied to concerns about Decatur on top of generic industry risks. Given management’s confidence that clearing Decatur is a when not an if, we like the set up for the stock from here, and are moving to a Buy rating (our PT remains $28)," said Gilbert.

"Regarding the DOJ investigation, as far as we know AKRX has not been notified that it is a subject of the investigation. We also believe that management is shareholder friendly and is doing the right things to position AKRX for long-term value creation. An under-levered balance sheet (net debt/EBITDA of ~1.3x) creates some optionality as well," added the analyst.

For an analyst ratings summary and ratings history on Akorn click here. For more ratings news on Akorn click here.

Shares of Akorn closed at $19.68 yesterday.

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