Shire PLC: A rare opportunity!
BUY Coverage initiated, Fair Value 5900p (+38%)
A rare opportunity!
We are initiating coverage of Shire with a BUY recommendation and a FV of GBp5,900 with the dawn of a transformative merger with Baxalta. Beyond the fact that we see significant upside (+45%), in our view the pressure on the share price caused by the current arbitrage strategies, along with doubts regarding the potential value creation, have created an opportunity as 1/ Shire ex-Baxalta is a strong growth story associated with an attractive valuation (P/E 2017e: 12x); 2/ we believe the merger should accretive on earnings by 2017e.
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