UPDATE: Bank of America Reiterates Buy Rating, Raises PT on Akorn Following Hi-Tech Acquisition Announcement

In a report published Thursday, Bank of America analyst Sumant S. Kulkarni reiterated a Buy rating on Akorn AKRX, and raised the price target from $18.00 to $21.00. In the report, Bank of America noted, “On 8/27, AKRX announced that it is buying Hi-Tech (HITK, which we also cover) for $640mn in cash. Via HITK, AKRX will expand its generic ophthalmology offering, and add capabilities in oral liquids, ointments, creams and sprays. We believe this transaction makes strategic sense as it would allow AKRX to build out a more robust and diversified platform in these relatively attractive niches within the consolidating generic pharma industry. Recall that AKRX is already in the injectables arena. We model a late-1Q14 deal close and our preliminary pro forma analysis suggests solid accretion. Our new 2014/15E EPS are $0.94/$1.16 vs. $0.78/0.89 (on AKRX's basis, excludes stock comp). Based on this, we are raising our DCF-based price objective to $21 vs. $18 and are reiterating our Buy rating.” Akorn closed on Thursday at $18.29.