Jefferies Stays Positive On WCRX Despite Slow Start For Atelvia

Jefferies is maintaining a Buy rating and $29 price target on Warner Chilcott PLC WCRX, despite a slow start for the company's Atelvia. Says Jefferies, in the report, “At only ~6x 2011 EPS, Warner Chilcott is the cheapest name in Spec Pharma – a group with an average P/E of 14x (range 6x-23x). But valuation arguments alone tend not to make the best investment theses. The lack of obvious growth drivers is probably responsible for the discount. While not at the top of our BUY list, we like the stock for its cash flow and management's ability to execute value creating business development transactions.” WCRX closed yesterday at $24.10.