Event Driven Pharma: Shire Plc (SHP LN)
Worth speculating in the current environment - BUY
SHP LN: GBP 32.63 – tgt GBP 50.00
April 30, 2014
Shire is currently the focus of intense bid speculation. Given the “hot environment” in the pharma sector, Shire certainly fits the bill as a potential buy-out candidate. Its market cap is digestible ($32bn), the company is not controlled (unlike Meda or UCB for example), and it has an attractive portfolio which makes it one of the fastest growing pharma stocks. Moreover, and this is key for us to recommend the stock, Shire is significantly undervalued, particularly against other “deal stocks’ in the sector. Hence, we recommend a position in the name. Our target is significantly above the current share price, at GBP 50.0
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