Roche: shares rise after broker upgrade
(CercleFinance.com) - Roche shares rose on Friday after Bank of America-Merrill Lynch upgraded the Swiss biopharmaceutical giant from "neutral" to "buy".
BofA-ML said that the share's underperformance relative to its sector over the past year, due to biosimilar overhang and a paucity of pipeline data, have created a "floor" valuation.
"Visibility on exact US biosimilar erosion rates (...) and pipeline progression (...) should allow PE re-rating, in our view, as investors look to a post cliff period," the broker pointed out in a research note on the European pharma industry.
BofA-ML has added the stock as a "top-pick" and has raised its target price from 300 Swiss francs to 320 Swiss francs.
Roche shares are currently up 0.6% at 270.5 Swiss francs in Zurich, outperforming the SMI index, which is down 0.5%.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
BofA-ML said that the share's underperformance relative to its sector over the past year, due to biosimilar overhang and a paucity of pipeline data, have created a "floor" valuation.
"Visibility on exact US biosimilar erosion rates (...) and pipeline progression (...) should allow PE re-rating, in our view, as investors look to a post cliff period," the broker pointed out in a research note on the European pharma industry.
BofA-ML has added the stock as a "top-pick" and has raised its target price from 300 Swiss francs to 320 Swiss francs.
Roche shares are currently up 0.6% at 270.5 Swiss francs in Zurich, outperforming the SMI index, which is down 0.5%.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.