Allergen's (AGN) Stand-Alone Price Target is $282 at Deutsche Bank
Deutsche Bank analsyt Gregg Gilbert said his stand-alone price target for Allergen (NYSE: AGN) is $282. Comments follow reports its deal with Pfizer (NYSE: PFE) could be in jeopardy given the U.S. Treasury's changes targeting tax inversions.
"Recall that we have been using a deal-driven price target methodology for AGN (PFE @ $30 x 11.3 shares = $339 for AGN). If we were to shift back to a stand-alone price target methodology based on our updated model (see below for tweaks), our one-year target would approximate $282," said Gilbert.
"Our model assumes that AGN sells its generics business to TEVA by the end of June, but it is important to note that our stand-alone model/target (1) does not credit AGN ahead of time for what would be a strong and under-levered balance sheet, and (2) does not factor in a potential restructuring that could reduce operating expenses and boost EPS," continued the analyst.
Gilbert added, "On the other hand, we would note that continued stand-alone execution will be key for AGN but may be somewhat more challenging in light of what has likely been a distracted employee base. With investor sentiment at poor levels for the space, and the natural skepticism that may follow when a company had agreed to sell itself, some investors may take a more wait-and-see approach."
Deutsche Bank has a Buy rating and $339 price target on the stock.
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Shares of Allergen closed at $277.55 yesterday.