By Market News Video Staff, Thursday, April 14, 3:24 PM ET
Today, Citigroup (NYSE:C) raised its price target on shares of Endo Pharmaceuticals Inc. (NASDAQ:ENDP) from $42 to $48. With the price adjustment, Citi maintained its buy rating on the Chadds Ford, Pennsylvania based company. Citi’s price adjustment comes after Endo’s recent acquisition of urology device company American Medical Systems Holdings Inc. (AMMD) for $2.6 billion, or $30 per share. Endo will incur $312 million of AMMD’s debt in the deal. As a result, “Standard & Poor's said it is putting Endo's BB+ credit ratings on CreditWatch with negative implications and expects to lower the corporate rating by one notch to BB after the deal closes while assigning a stable rating.”
According to Citi, the transaction will provide Endo with a number of underappreciated aspects such as, “1) diversification, 2) high sales growth, 3) high urology market shares and 4) expansion into ex-US markets.”
Shares of Endo Pharmaceutical are trading lower on Thursday.
Endo Pharmaceutical is a major component of the SPDR S&P Pharmaceuticals ETF (AMEX:XPH), which is trading flat at $48.91 for the day. Other top holdings of the Fund include Perrigo (NASDAQ:PRGO), Medicis Pharmaceutical (MRX) and Pfizer (NYSE:PFE).
For a complete list of holdings, visit the XPH Holdings page on ETFChannel.com
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