UPDATE: Oppenheimer Downgrades Lannett Company as Outperformance Leads to Fair Valuation

In a report published Wednesday, Oppenheimer analyst Rohit Vanjani downgraded the rating on

from Outperform to Perform, and removed the $20.00 price target. In the report, Oppenheimer noted, “We are downgrading shares of LCI to Perform and removing our $20 PT, due largely to recent significant outperformance. LCI is up ~40% since reporting F4Q13 (9/10/13, vs. S&P500 +4%). The shares are now trading at 31x our C2014 estimate, exclusive of the secondary offering (29x consensus), and 34x including it. We note that there are a few remaining catalysts for LCI that we will closely monitor, including the price increase on digoxin in mid-October of over 5x. Additionally, we still believe in LCI's long-term strategy, and management's leadership in converting the company to one having outsized sales from controlled substances within five years. However, near term, the now richer valuation is what leads us to the downgrade.” Lannett Company closed on Tuesday at $21.97.