Mizuho Securities Raises Price Target on Depomed (DEPO) Following Starboard's Activism Announcement; Reiterates Neutral
Mizuho Securities reiterated a Neutral rating on DepoMed Inc (NASDAQ: DEPO), and raised the price target to $18.00 (from $14.00), following Starboard's activism announcement. Mizuho expects the stock to trade in a higher range after Starboard Value disclosed its position in DEPO last week. After touching base with HZNP and DEPO management, and shareholders in both companies, Mizuho believes that a near-term takeout is unlikely.
Analyst Irina Koffler commented, "We are incorporating a 20% probability of company takeout into our DEPO valuation assumptions following Starboard's activism announcement. We expect a drawn-out battle but also acknowledge that this situation should provide support to the stock, even in the face of any weaknesses in the business. We raise our PT to $18 from $14 but reiterate our Neutral rating."
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Shares of DepoMed Inc closed at $16.95 yesterday.