Allergan Inc. benefits from the strongest balance sheet among its peers and a stable revenue base from some established drugs, according to a Citi analyst who raised her rating on the drug developer's shares.
The Irvine, Calif., company should see double-digit annual growth through 2018 from a couple of key products, Botox injections and the eye treatment Restasis, analyst Liav Abraham said in a research note.
"We believe Street estimates are still not appreciating the renewed longevity of the company's Restasis franchise, as well as the long-term growth potential of its Botox franchise, which together accounted for 47 percent of group sales and benefit from above-average margins," the analyst wrote in a Monday research note.
Abraham said in a Monday research note that Restasis could face a patent challenge from a cheaper generic product later this year, but she termed that an "unlikely scenario." The analyst raised her rating on the shares to "buy" from "neutral" and increased her price target to $130 from $95.
Allergan executives are scheduled to discuss the company's fourth-quarter results on Wednesday.
Shares of Allergan rose 57 cents to $112.83 in premarket trading Tuesday about 2 ½ hours ahead of the market opening. The stock is up about 1 percent so far this year.