NEW YORK (TheStreet) -- Shares of Shire Plc (SHPG) are surging in pre-market trade, up 13.73% to $218.04, after the U.K. drug company turned down a 27.2 billion pound, or $46.35 billion, takeover bid from AbbVie Inc. (ABBV), in the latest move by a U.S. company to go after a deal for a company with a lower tax rate, the Wall Street Journal reports.
Shares of AbbVie are up 4.26% to $56.50 in pre-market trade.
TheStreet Ratings team rates SHIRE PLC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SHIRE PLC (SHPG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, reasonable valuation levels and compelling growth in net income. 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 came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues rose by 17.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, SHPG's share price has jumped by 84.26%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SHPG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Pharmaceuticals industry and the overall market, SHIRE PLC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 255.6% when compared to the same quarter one year prior, rising from $64.80 million to $230.40 million.
- You can view the full analysis from the report here: SHPG Ratings Report