Needham & Company Upgrades Warner Chilcott (WCRX) to Buy

August 9, 2012 8:16 AM EDT Send to a Friend
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Price: $22.93 --0%

Rating Summary:
    6 Buy, 10 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Needham & Company upgraded Warner Chilcott (NASDAQ: WCRX) from Hold to Buy with a price target of $20.00.

“Our thesis is simple,” said analyst Elliot Wilbur, “investors are getting paid substantially, 24% cash money by the end of 3Q12, to bank on management over the next 12-18 months. While trusting management to do a deal and reduce intermediate-term revenue cliff concerns has been a value trap for years, WCRX’s declaration of a new special dividend doesn’t change the acquisition landscape, in our view, or dramatically alter WCRX’s financial flexibility in terms of executing a deal, although it clearly reduces the size potential of any transaction over the next 12 months.”

Wilbur thinks the new $0.50 regular dividend vaults WCRX into the dividend play category and, combined a $25 million share repurchase, should provide significant downside support to offset multiple contraction or EPS erosion.

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

Shares of Warner Chilcott closed at $16.54 yesterday.


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