Citing a confluence of factors that bode well for the future, Cantor Fitzgerald analyst Irina Rivkind Koffler has upgraded her rating of Salix Pharmaceuticals to a “buy.”
Koffler also boosted her 12-month target price for the Raleigh-based company’s stock to $157.
Salix shares were trading at $137.19, down 4 cents, Wednesay afternoon.
In a research note issued Wednesday, Koffler cited several factors behind her increased optimism. They included: the pending merger with Cosmo Phamaceuticals, a subsidiary of an Italian drug company, which will lower Salix’s tax rate; the recent approval of Ruconest, a Salix drug for treating acute angiodema, a swelling just under the skin that is similar to hives; and a higher probability that the company’s pending application for Relistor, a treatment for constipation in patients taking pain medicines, ultimately will win Food and Drug Administration approval.
Koffler also expects that Salix’s second-quarter earnings will considerably outpace Wall Street’s estimates. Salix plans to release its second-quarter numbers after the market closes Thursday.
Koffler expects the company to generate $431.4 million in revenue and realize earnings per share of $2.17. That compares to consensus estimates of $396 million and $1.68 per share.
Meanwhile, Sterne Agee analyst Shibani Malhotra wrote in a new research note that she is maintaining her “buy” rating on Salix.
“We continue to see Salix as one of the best risk/reward plays in our space and continue to recommend that investors build a position in the name,” Malhotra wrote. “Strong organic growth in Xifaxin (Salix’s top-selling drug), recent positive developments with Relistor and Ruconest and near-term M&A provide significant upside potential.”