Allergan, Inc Up As Deutsche Bank Initiates Coverage With Buy Rating

Deutsche Bank initiated coverage of Allergan, Inc AGN in a report issued Wednesday with a Buy Rating and price target of $215.

Analyst Gregg Gilbert viewed Allergan as a “best-in-class Specialty Pharma company, with an attractive combination of strong and sustainable organic growth, robust balance sheet, and interesting pipeline opportunities.”

Gilbert also noted multiple upside routes based on “(1) a smart acquisition by AGN, (2) an acquisition of AGN by Valeant Pharmaceuticals Intl Inc VRX, at current or improved offer terms, or (3) an acquisition of AGN by another company. AGN has a robust balance sheet and significant borrowing capacity to support a meaningful strategic acquisition, which is not reflected in our $215 target.”

According to the report, Allergan expects its current business to drive double-digit revenue growth over the next five years (2014-19). While our estimates are somewhat more conservative relative to the “management” scenario, we model higher growth for AGN relative to most of the group. We view AGN’s growth potential as particularly attractive given the company’s large market cap.”

Allergan, Inc. closed Wednesday at $190.50, up 2.31 percent.

Valeant Pharmaceuticals Intl. Inc. closed Wednesday at $125.90, up 0.54 percent.