Zacks Investment Research downgraded shares of Shire plc (SHPGY) from OUTPERFORM to NEUTRAL on July 04, 2014, with a target price of $249.00.
Shire reported first quarter 2014 earnings of $2.36 per ADS, beating the Zacks Consensus Estimate of $2.22. Quarterly revenues increased 18% to $1.3 billion, in line with the Zacks Consensus Estimate. The acquisition of ViroPharma is expected to boost the bottom line by 7% in 2014. AbbVie recently proposed to acquire Shire for 20.44 in cash and 0.7988 AbbVie shares per Shire share. The proposal was initially made on May 30, 2014. However, Shire reiterated that its board has already considered the proposal in detail and unanimously rejected it as it believes that the proposal fundamentally undervalues Shire and its prospects. With the proposed acquisition, the stock has been holding up steady in the last few days. However, we do not see further upside potential at the current levels and downgrade our recommendation to Neutral.
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