UBS published a note Wednesday saying that the problems that caused a 20% dip in Allergan's share price over the past 12 months are behind the company.
Management is being aggressive on cost-cutting measures. Additionally, three key events over the next 6 months should turn investor sentiment for the company positive in 2018.
The firm expects positive phase 3 testing data for the company's chronic migraine treatment, approval and a solid label for Allergan's uterine fibroid treatment Esmya, and positive phase 3 data for Abicipar, Allergan's macular degeneration treatment.
Allergan still has soft top-line guidance between $15 billion and $15.3 billion, which lags UBS' own estimate of $15.7 billion, and Wall Street's consensus $15.6 billion expectations. But with cost cuts between $300 million and $400 million expected, there is still reason to believe the company can beat bottom-line expectations.
UBS maintained its "buy" rating and $250 price target for the company, a 42% upside over the stock's previous close.
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