Story updated at 9:55 a.m. to reflect market activity.
Forest Laboratory gaine 0.2% to $93.44 in morning trading.
The firm reiterated its "neutral" rating for the stock. The increased price reflects 'the combination of the cash ($26.04) and the stock components (0.3306/FRX share)" of the recent takeover offer according to UBS analyst Marc Goodman.
Separately, TheStreet Ratings team rates FOREST LABORATORIES as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate FOREST LABORATORIES (FRX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, expanding profit margins, compelling growth in net income and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 34.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FOREST LABORATORIES has improved earnings per share by 17.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, FOREST LABORATORIES turned its bottom line around by earning $0.62 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $0.62).
- The gross profit margin for FOREST LABORATORIES is currently very high, coming in at 83.31%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FRX's net profit margin of 4.95% significantly trails the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 19.0% when compared to the same quarter one year prior, going from $45.44 million to $54.08 million.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 137.28% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: FRX Ratings Report