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Shire brokers re-assured after meeting management

Published: 09:28 11 Nov 2016 GMT

Shire2_opt
The company has a couple of fans in the City.

The feedback from a capital markets day held by pharma giant Shire Plc (LON:SHP) appears to have settled some nerves among the broking and banking community – not that you’d know this from the share price.

At 9.15am, the stock was off almost 4% lower at £48.99.

The event was the first real sit-down the Shire team has hosted since its US$32bn takeover of US rival Baxalta.

It also followed last week’s quarterly results, which showed revenues undershot market forecast as the druggie absorbed the costs of the deal.

Credit Suisse picked up on Shire chief executive Flemming Ornskov’s optimism over its newly launched product, Xiidra, for a condition called Dry Eye Disease.

The market reckons this one drug could eventually turn over US$800mln a year. However CEO Ornskov thinks sales could be a lot higher, the Swiss bank told clients.

US brokerage Jefferies, meanwhile, pointed out Xiidra had been the best consumer launch since Viagra.

According to the brokers, management is confident of its ability to hit a target of US$20bn in revenues by 2018 - some US$2bn ahead of consensus forecasts.

Credit Suisse repeated its ‘overweight’ stance on the stock and £52 price target. Jefferies is also ‘buyer’.

Shire it seems has quite a City fan club. According to the Broker Forecasts, which logs analyst recommendations, 15 of the 16 stock pickers that follow that follow the company are ‘buyers’ of the shares.

The consensus price target, which was £48 six months ago, now stands just over £60.

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