Alcon May Receive Improved Offer From NVS Soon
Analysts at Collins Stewart reiterate their "buy" rating on Alcon (NYSE: ACL). The target price for ACL is set to $180.
Alcon’s share price recently declined. “ACL's share price has been driven by NVS share price since NVS offered ACL's minority shareholders 2.8 shares of its stock for each share of ACL's stock early this year. The weakness in NVS stock is partly as a result of the weakening Euro and uncertainty regarding the EU debt crisis. It is our understanding that this has driven the unwinding of some net long risk/arb trades… We would also expect ACL shares to start trading closer to their intrinsic value (which we believe is $180) and not the NVS deal price given how much the stock has pulled back.” “Therefore, if ACL continues to report strong quarters such as what was seen in 1Q10, NVS may lose an opportunity to negotiate the best deal for itself,” the analysts say. As a result, NVS may raise its initial bid for ACL shares soon.
