Setting a bottom of 3,350p for the tobacco group, the broker believes consolidation has returned to the tobacco sector.
Dividends of 8% will be received within 16 months and the shares are worth 4,350p in Deutsche’s view.
Vadim Alexandre has the stock as a ‘buy’ and has high expectations for the company, setting a price target of 137p – more than a quid higher than what the stock currently trades at.
“You’ve got a potential blockbuster drug [in Lupuzor], this [current] valuation is way too low for that programme on its own, and that says nothing about the oncology programme [either],” Alexandre tells Proactive.
While the incoming Trump administration's actual policy stance towards Mexico remains unclear, 67% of its costs are Peso-based and so the group would be a clear beneficiary of a weaker currency, notes analyst Jonathan Guy.
As the iron ore price posted its sharpest fall in five years, albeit after an almighty upward run, a heavyweight London broker has tipped the metaphorical bucket of cold water over the prospects for mining stocks.
JP Morgan Cazenove believes investors are probably over-estimating the potential impact of a Trump presidency on the sector and not really assessing the risks.
As a result, the rally in industrial metals values seen over the last week is probably out of touch with reality, it added.
Another risk is competition, particularly from Associated British Food Plc (LON:ABF) Primark.
“The main risk is whether Primark destabilises the low end of the market to the degree that the mid market will be unable to make price increases stick,” the analyst said.
The German broker notes that prospects in the US Permian Basin are now changing hands for up to US$45 per acre, which puts a value of US$10bn on its 2bn barrel Delaware position.
Buy is Deutsche’s view with a 2,220p price target. Shares today were 2,068p.