Deutsche Bank Maintains Buy Rating on Allergen (AGN)

Deutsche Bank maintained a Buy rating on Allergen (NYSE: AGN) with a price target of $217. Comments follow Q3 results. Analyst Gregg Gilbert called it a strong quarter, though he noted earnings is not the main story right now.

"AGN reported strong 3Q results, as previously pre-announced, with sales up 17% and EPS up 45%. On the Valeant (NYSE: VRX) front, AGN’s CEO David Pyott on the call did not rule out the potential of an acquisition before the 12/18 special meeting, and went out of his way to note that shareholders would be supportive of a share buyback if a large deal is not announced."

"For illustrative purposes, if we were to assume that AGN could lever up to 3x (debt/2014E EBITDA) to fund a stock buyback at current levels, our EPS estimates could be 5-6% higher in 2015-16 (while leaving AGN with its current $4.2bn of cash and investments). We would hope that an acquisition, should one occur, would offer a better return vs. a buyback. As it has done before, management acknowledged that a combination of a deal and returning cash to shareholders is also a possibility," he added.

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

Shares of Allergen closed at $184.21 yesterday.

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