UPDATE: Credit Suisse Initiates Coverage on Taro Pharmaceutical on Market Leader Position

In a report published Wednesday, Credit Suisse analyst Anubhav Aggarwal initiated coverage on

with an Outperform rating and $85.00 price target. In the report, Credit Suisse noted, “We initiate coverage on Taro with OUTPERFORM and $85 TP. Taro is the leader in the US derma generic market. Dermatology is an attractive segment with high entry barriers and high margins. Taro's stock is factoring in sales decline but we expect a 5% sales CAGR over the next four years as: (1) Taro currently addresses only half of derma generic market; (2) derma generic market should grow at 6% CAGR over FY14-17; (3) Taro has already accelerated its filings and (4) sales loss on Taro's largest product is offset by price increase in the rest of the portfolio.” Taro Pharmaceutical Industries Ltd. closed on Tuesday at $69.43.