Citi Maintains Buy On WPI

Citi is maintaining its Buy rating and its $82 price target on Watson Pharmaceuticals WPI in light of expected margin expansion from the company. Says Citi, in its report, “We project Concerta sales of $132M/$156M in 3Q11/4Q11 & Lipitor sales of $345M in 4Q11 (Nov. '11 launch) to fuel +23%/+51% YOY growth, respectively. We project 2Q11 branded sales of $113M growing to $115M/$122M from marketed brands (esp. Rapaflo & new launches). We expect 2Q11 trough distribution sales of $176M growing to $203M/$214M, as ~$8.8B in brands goes generic in 2H11 (vs. ~$6.5B in 1H11).” WPI closed yesterday at $62.16.