Cantor Fitzgerald Upgrades Warner Chilcott (WCRX) to Buy Ahead of Q3 Results

Cantor Fitzgerald upgraded Warner Chilcott (NASDAQ: WCRX) from Hold to Buy with a price target of $15.00 (from $14.00).

The firm comments, "We expect a strong 3Q:12 to rally the stock: We model revenues of $644M and adjusted EPS of $0.90 versus $597M and $0.76 (Thomson consensus). We see upside from the strength of the oral contraceptive (OC) and hormone replacement franchises as well as from a rebound of Asacol/HD after a 2Q:12 dip. There is also significant operational leverage. At a September investor conference management indicated that investors could expect the efficiencies of its new EU distributor model to be revealed in 3Q:12, which suggests upside to our earnings estimate. Management previously guided to 2012 SG&A spending of $775-825M and R&D expense of $100-120M vs. our estimates of $790M and $111M, respectively. If the company manages to remain at the lower end of the expense range then it can easily beat our 2012 adjusted EPS estimate of $3.90 (vs. $3.45 consensus)."

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 $11.35 yesterday.

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