Deutsche Bank Securities Reiterates its BUY Rating on Allergan

October 29 00:00 2011

NEW YORK, October29 ( – Analyst David M Steinberg of Deutsche Bank Securities reiterates his BUY rating on the shares of Allergan (NYSE: AGN). The 12-month target price is set to $97.

In a research note published on October 27, analyst David M Steinberg of Deutsche Bank Securities mentions that Allergan’s rating is unchanged post Q3 results. The company posted its Q3 EPS ahead of the estimates and the consensus. Total revenues were in line with the estimates, with Botox and medical devices revenues ahead of the expectations, and eye care revenues short of expectations, the analyst says.

Allergan’s Q3 results were influenced by robust growth in Botox franchises, driven by chronic migraine and cosmetic markets, the analyst says. The performance of Facial Aesthetics division was driven by new consumers, increased usage per consumer and strong ex-growth from Voluma, the analyst says. AGN’s R&D day is viewed significant as updates on new Botox indications, eye care pipeline and urology program will be released. The company has raised its FY11 EPS guidance is from$3.59-$3.63 to $3.62-$3.64.

The analyst believes the key risks to the investment thesis of Allergen stock and the target price are shrinking consumer demands of aesthetic products, increased competition in essential product segments and regulatory/clinical delays in developing products.

Allergan is an established premier global company in eyes and skin care pharmaceuticals, as well as medical aesthetics. The company has remarkably broad diversification across products, geographies. Its mix of reimbursed versus cash-pay businesses and sustainability of its revenue base are rare to see in pharma companies, the analyst says.