Goldman Sachs Comments On Warner Chilcott Following Recent Earnings Report

Warner Chilcott WCRX shares responded well Friday to strong top and bottom line numbers for the first quarter. Not surprisingly, business development remains a key theme and, potential driver of meaningful upside on the right deal and likely to continue to be a primary investor focus over the nearterm. Overall, Goldman Sachs leaves 1Q with EPS moving higher and, while no change to the Neutral rating, it continues to see an upside skew in the stock. Goldman Sachs posts the quarter and review of our model, our EPS estimates rise modestly to reflect strength on the quarter and 2011 EPS estimate is once again above the guidance range. Its new 2011 to 2015 EPS estimates are $3.86, $4.13, $4.63, $3.78, and $3.80. Key areas of focus include: Business development activity, which remains a priority and where significant capacity exists; The balance of Doryx and Loestrin 24 prescription trends versus higher realized prices; and the trajectory of OUS Actonel declines. Goldman Sachs has a Neutral rating and $28 PT on WCRX WCRX closed Friday at $23.50