Actavis' Growth 'Underappreciated,' Sterne Agee Says

In a report published Wednesday, Sterne Agee analyst Shibani Malhotra commented that Actavis plc's (NYSE: ACT) growth profile remains "underappreciated" and investors should buy shares following recent weakness related to a pending offering.

Malhotra wrote that the company's Investor Day presentation reaffirmed a positive view of management's ability to execute its long-term strategy and create "significant" shareholder value. The analyst added that its legacy pipeline remains offers several potential "attractive" opportunities within the next five years.

Malhotra explained that the company's earnings per share guidance increase to $16.30 - $17.30 from a prior $15.60 - $16.80 is "encouraging" and demonstrates the underlying organic growth trends of the combined Actavis/Allergan entity which "is not reflected in the current valuation."

Bottom line, the analyst concluded that "growth remains a top priority" and investors should take advantage of current weakness related to the near-term equity offering to build or add to positions.

Shares are Buy rated with a $315 price target.