NEW YORK (TheStreet) -- Shares of Allergan (AGN) are up 1.18% to $192.30 after the Botox maker, fighting off an acquisition by Valeant Pharmaceuticals (VRX) , said today that it had been approached by another party about a possible transaction.
The company is Actavis (ACT) , sources told Reuters.
Allergan made the disclosure in a regulatory filing today, and has said it was looking for acquisitions but has not previously said it had been contacted about a deal, Reuters said.
Valeant and Pershing Square Capital Management, which owns nearly a 10% stake in Allergan, made an offer now worth $55 billion for Allergan in April.
TheStreet Ratings team rates ALLERGAN INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALLERGAN INC (AGN) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and increase 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 9.8%. Since the same quarter one year prior, revenues rose by 16.6%. 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.
- The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.29, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to its closing price of one year ago, AGN's share price has jumped by 107.42%, 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, AGN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ALLERGAN INC's earnings per share declined by 6.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALLERGAN INC increased its bottom line by earning $4.20 versus $3.57 in the prior year. This year, the market expects an improvement in earnings ($6.29 versus $4.20).
- The gross profit margin for ALLERGAN INC is currently very high, coming in at 87.09%. Regardless of AGN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 17.19% trails the industry average.
- You can view the full analysis from the report here: AGN Ratings Report