Barr Labs Jumps on Upgrade - TheStreet

Barr Labs Jumps on Upgrade

First Albany cites its strong drug pipeline and prospects for good comparisons.
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Shares of

Barr Laboratories

(BRL)

rose about 8% after the company was upgraded by a First Albany analyst who said earnings will benefit from patent challenges and "an impressive pipeline of drugs."

The shares ended up $4.70 to $63.95.

Analyst Adam Greene also cited a low valuation, prospects the company will post solid quarterly earnings compared to last year and Barr's "consistent new approval flow." He raised the stock to buy from neutral and set a $72 price target.

The stock has fallen 14% in the past few days on dilution concerns after Barr said it might buy Irish drugmaker

Galen Pharmaceuticals

. But Greene said the company's management is "one of the most well regarded in the industry and has a history of smart deals." He doubts Barr would enter a transaction that would hurt earnings significantly.

The key risks to the company are competition from companies that make generic oral contraceptives and Barr's upcoming 2004 EPS outlook, the analyst said. Greene currently expects earnings of $2.59 a share in 2003 and $3.19 a share in 2004. Analysts' consensus is $2.60 a share in 2003 and $3.22 a share in 2004.