Deutsche Bank Boosts Mylan's Price Target On This Scenario

In a report rolled out Friday, Deutsche Bank analysts Gregg Gilbert and Greg Fraser reiterated a Buy rating and raised their price target on shares of Mylan NV MYL from $65 to $82. The new price target intends to reflect the initial offer to acquire the company that Teva Pharmaceutical Industries Ltd (ADR) TEVA made last Tuesday.

The firm’s analysis suggests that Teva could pay considerably more than $82. However, the analysts also note the risk of a deal not occurring.

Gilbert and Fraser explain that, while they we have been constructive on the concept of a Mylan-Perrigo Company plc PRGO combination, they believe that Mylan shareholders “will prefer the near-term risk/reward profile of a sale to TEVA (particularly at prices >$82) over that of an acquisition of PRGO by MYL, whose benefits may take more time to play out.” They add that they “certainly cannot predict the next steps in this process and would not rule out developments that could pressure MYL shares in the near term. At the end of the day, as long-term bulls on MYL,” they believe that Mylan’s management and Board “will act in the best interests of shareholders.”

Shares of Mylan were up more than 3 percent on Friday, Teva rose about 1.5 percent and Perrigo fell roughly 3 percent.