Jefferies analyst lowers rating, price target on Allergan
NEW YORK—Shares of Botox maker Allergan Inc. slipped 4 percent Friday afternoon, as a Jefferies analyst downgraded the stock to "Hold" from "Buy," ahead of the company's first-quarter financial report.
Shares dipped $3.05, or 5.3 percent, to close at $54.51. The stock has fallen from its $70.40 peak in January to reach a year-low of $52.26 last month.
Analyst Peter J. Bye said Allergan shares are attractive on a two- to three-year basis, but stock performance could be iffy in the coming months. He expects only modest first-quarter results when the company reports next Thursday, and a more conservative outlook.
While Allergan continues to gain market share across most product categories, Bye sees its stock being hurt by a potential slowdown in Botox and breast implant procedures amid a weak economy. He lowered his price target to $62 from $78, and said he will wait to see how well the company's June 4 research and development day is received.
"While we think AGN's pipeline is full of several legitimate shots on goal, the biggest near-term "value driver" is the upcoming Phase III data release for Botox in headache," he wrote in a note to clients, adding that he has less conviction that the late-stage trial will meet its primary goal.
"As a result, we consider the risk/reward tradeoff to be unfavorable through the June release of the Botox headache data," he said.
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