Bernstein: Alexion Pharma An Outperform, Worth $267/Share

In a report published Tuesday, Bernstein analyst Geoffrey C. Porges reiterated an Outperform rating on Alexion Pharmaceuticals, Inc. ALXN, with a price target of $267. Alexion has closed the acquisition of Synageva Biopharma Corp GEVA. Following the completion of the deal, analyst Geoffrey Porges expects Alexion to deliver combined non-GAAP EPS of $6.33 in 2016, $8.50 in 2017, and $10.78 in 2018. The estimates reflect expectations for the Kanuma launch. Porges expects the combined company to generate 19-24 percent top line organic growth in 2016-2017. This rate could slow to the mid-teens through 2020, while non-GAAP EPS growth is expected to accelerate to around 20 percent on an annualized basis through 2020, backed by cost synergies and "as the company applies its commercialization expertise in rare disease therapeutics to Kanuma." "We now estimate that the deal will be, on a non-GAAP EPS basis, accretive to ALXN's 2018 results," Porges wrote. Moreover, Alexion has announced an addition to its share buyback plan, taking the total to $1bn. "Assuming an average share repurchase price at the midpoint of its closing price of $184.40 on June 19, 2015 and our target price of $267/share, Alexion could potentially repurchase 4.4mm shares over the next few years, out an estimated 226mm diluted shares outstanding following the acquisition," the Bernstein report added.