Credit Suisse Sees Downside In Shares Of Salix Pharmaceuticals, Ltd.

Analysts at Credit Suisse initiated coverage on Salix Pharmaceuticals, Ltd. SLXP with an Underperform rating and $139 price target Friday.

Ronak H. Shah outlined the causes for the upgrade:

• An acquisition by AGN is unlikely. Shah stated, "The gap between SLXP’s takeout price implied by recent deals and the value that AGN could generate from SLXP suggest an AGN-led takeout is unlikely."
• Analysts see room for a 10 percent or more downward EPS revision in 2015 to 2018 due to risks from the company’s new HCV drugs.
• Uncertainty in the financial benefits of a deal with Cosmo. Analysts are expecting a large tax inversion from the deal.

Shares of Salix Pharmaceuticals recently traded at $146.53, down 1.6 percent.