UPDATE: Goldman Sachs Upgrades Forest Laboratories on Increased Potential for Strategic Options

In a report published on Friday, Goldman Sachs analyst Jami Rubin upgraded the rating on Forest Laboratories (NYSE: FRX) from Neutral to Buy and raised the price target from $40 to $50.

In the report, Goldman Sachs noted, "We upgrade FRX to Buy from Neutral on increased potential opportunities for restructuring/alternative strategies, in our view. Since we upgraded to Neutral on January 10, our view has gradually improved, initially based on room for margin improvement. On January 15, management indicated they needed one year to assess new launches. On May 23, FRX announced their CEO succession plans. Our evolved view is supported by comments made by FRX on June 11 at our annual HC conference indicating that a new CEO would be empowered to make strategic changes. We believe these changes could include more aggressive capital allocation such as use of debt and/or share repurchases."

Forest Laboratories closed on Thursday at $40.19