Recent news points to Pfizer (NYSE: PFE) in preliminary talks to acquire Allergen (NYSE: AGN). However, according to one analyst, the deal should be the other way around.

Nomura Securities analyst Shibani Malhotra said Allergen should buy Pfizer.

After looking at this scenario, Malhotra said "this would make the most sense."

The analyst exmpalns, " Allergan is an Irish company and therefore it could buy Pfizer without the deal being considered an inversion. More important, our pro-forma analysis suggests that Allergan buying Pfizer would be more valuable to the shareholders of both companies given that Allergan trades at a higher multiple than Pfizer (16.7x versus 12.8x 2017E EPS). We also highlight that accretion would be further increased if Allergan used Pfizer’s trapped overseas cash post close to quickly pre-pay debt allowing for meaningfully lower share issuance to fund the deal."

The firm reiterated a Buy rating and price target of $350 on AGN. The stock remains their Top Pick in the sector.

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 $308.47 yesterday.