Goldman Sachs Resumes Coverage Of Cephalon At Neutral (CEPH)

Goldman Sachs (NYSE: GS) has resumed their coverage of Cephalon (NASDAQ: CEPH) with a Neutral rating and a $65 12-month price target. The analysts wrote that "Cephalon has been proactive in business development efforts to drive product expansion and geographic diversification, which we believe can both reduce risk and, in conjunction with further pipeline investment, potentially drive long term value." They did, however, highlight growth headwinds for the Provigil/Nuvigil franchise and Amrix, and said that while they see near-term EPS support, there is a lack of catalysts "to drive a meaningful upside move in shares."

Goldman's $65 price target implies a 9.1x P/E on the firm's 2011 earnings forecasts. The valuation reflects CEPH's growth challenges. Goldman is projecting a three-year CAGR of -6%. During today's trading session, CEPH has gained 0.18% to $56.81.