RBC Upgrades Shire To Outperform, Says Market Overestimating Competition

• Shares of Shire PLC (ADR) SHPG have plummeted 25 percent since January 4 this year.
• RBC Capital Markets’ Douglas Miehm upgraded the rating on the company from Sector Perform to Outperform, with a price target of $240.
• The recent decline in stock more than accounts for any competitive risks arising from Baxalta Inc’s BXLT Hemophilia business, Miehm stated.

Analyst Douglas Miehm mentioned that Shire is a high quality pharmaceutical biotech company with a strong management team. Shire’s product offerings are expected to expand with the addition of Baxalta’s Hematology, Immunology and Oncology franchises.
“We have now reviewed the competitive threat facing the hemophilia portfolio and believe the current share price, especially given the weakness observed over the last month, more than accounts for the future competitive environment,” Miehm stated.
The combined entity will have a strong pipeline with over 60 programs in development, of which management expects more than 30 to be launched by 2020.
Shire is expected to report 4Q15 revenues of $1,698 million and EPS of $2.91, marginally above the consensus expectations. The company’s 2015 revenues and EPS are expected at $6,399 million and $11.60, respectively.