S&P Downgrades Actelion From Strong Buy to Hold (ALIOF)

S&P downgraded European drug maker, Actelion

from Strong Buy to Hold, yesterday. Actelion trades in Europe, and on the pink sheets here in the U.S. Here are a few quotes from the report: “We downgrade Actelion to Hold from Strong Buy but maintain our 12-month DCF/multiples target price of CHF 52 (that is the European stock). Our positive stance on the fundamental investment case remains intact but after last week's takeover market speculation leading to a 23.4% share price rally the valuation looks fuller limiting the upside at present. Prior to this rally, the share price had in 2010 fallen excessively, we think from clinical trial disappointments and the FDA complaining recently about inadequate clinical reporting, leading us to argue the share being undervalued. On our estimates, the share trades on fiscal-year 2011E P/E 11.8x, a 13% discount to our peer group consistent with our relative valuation approach. We find the current price still not reflective of the value of the existing business and pipeline potential in support of our revised stance./J. Thrane”