UPDATE: UBS Upgrades Abbvie (ABBV) to Buy
UBS upgraded Abbvie (NYSE: ABBV) from Neutral to Buy with a price target of $67 (from $57). Analyst Marc Goodman noted compelling risk/reward.
"Upgrading ABBV to a Buy rating and PT of $67 with 4-fold investment thesis (1) We like the Shire deal. It's accretive, diversifies earnings away from Humira, adds long duration assets, and positions the co with a lower, more efficient tax structure. (2) Earnings expectations for the next few years are too low based on strong current Humira trend, the Shire deal, and the HCV franchise. We are raising our HCV sales once again based on the larger market size driven by the stronger than expected uptake for products from Gilead and J&J. We now assume ~$3B of peak sales, only 13% market share," said Goodman.
"(3) The pipeline (excl HCV) is interesting (eg, ABT199 for cancer, Elagolix for WH) but gets minimal attention and has very low expectations and thus should be a source of upside. (4) We have factored into the model an aggressive decay curve for Humira from biosimilar competition, peak sales in year 3 for HCV from additional branded competition and price erosion, and generic competition for Lialda in late 2015. We believe the stock more than adequately discounts these three important risk factors," he added.
For an analyst ratings summary and ratings history on Abbvie click here. For more ratings news on Abbvie click here.
Shares of Abbvie closed at $53.18 yesterday.