Bernstein Says Onyx Acquisition Could Boost Amgen Earnings 25% by 2020
Shares of Amgen (NASDAQ: AMGN) rose nearly 7 percent Wednesday while Onyx Pharma (NASDAQ: ONXX) shares fell about percent following a mid-day Reuters report Amgen is now expected to pay $130/share in its acquisition of Onyx Pharmaceuticals (NASDAQ: ONXX).
RBC analyst Michael Yee is commenting on the rumor Thursday morning, suggesting more near-term gains could come if the acquisition goes through. Yee sees 0-6 percent added to Amgen EPS in 2014 on profit potential, price-to-earnings expansion, and interest from "growth investors." Further EPS gains of 5-8 percent could eventually be realized through overlapping expense cuts.
While investors in Amgen are taking profits Thursday morning, shares of Onyx are trading about $0.05 higher.
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