Deutsche Bank Downgrades Elan Corp (ELN) to Hold; Post Tysabri Deal M&A Activity in Focus
Tweet Send to a FriendGet Alerts ELN Hot Sheet
Price: $12.47 +0.89%
Rating Summary:
1 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
1 Buy, 7 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade ELN Now!
Deutsche Bank downgraded Elan Corp (NYSE: ELN) from Buy to Hold with a EUR 7.60 price target following the sale of Tysabri to Biogen.
The firm comments, "Elan’s decision to cede control of Tysabri to Biogen seems to be an attractive deal for both sets of investors to us. Although our valuation suggests the deal is marginally dilutive to our NPV, Elan has swapped hope for certainty. In addition, materialization of this asset allows it to accelerate both utilization of tax losses and its business development efforts, while retaining 25-30% of the future profits of Tysabri. However, uncertainty over use of proceeds sees us move to the sidelines. Downgrade from Buy to Hold.
The firm notes M&A is likely the near-term focus, with management making it clear that the "majority" of proceeds will be utilized to diversify the company’s pipeline and revenue base.
For an analyst ratings summary and ratings history on Elan Corp click here. For more ratings news on Elan Corp click here.
Shares of Elan Corp closed at $10.46 yesterday, with a 52 week range of $9.64-$15.27.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
The firm comments, "Elan’s decision to cede control of Tysabri to Biogen seems to be an attractive deal for both sets of investors to us. Although our valuation suggests the deal is marginally dilutive to our NPV, Elan has swapped hope for certainty. In addition, materialization of this asset allows it to accelerate both utilization of tax losses and its business development efforts, while retaining 25-30% of the future profits of Tysabri. However, uncertainty over use of proceeds sees us move to the sidelines. Downgrade from Buy to Hold.
The firm notes M&A is likely the near-term focus, with management making it clear that the "majority" of proceeds will be utilized to diversify the company’s pipeline and revenue base.
For an analyst ratings summary and ratings history on Elan Corp click here. For more ratings news on Elan Corp click here.
Shares of Elan Corp closed at $10.46 yesterday, with a 52 week range of $9.64-$15.27.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- UPDATE: MKM Partners Downgrades Alkermes (ALKS) to Sell
- Baird Downgrades Titan Machinery (TITN) to Neutral
- Goldman Sachs Downgrades Aixtron (AIXG) to Neutral
Create E-mail Alert Related Categories
DowngradesRelated Entities
Deutsche Bank
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
