UPDATE: Goldman Sachs Raising Price Target On Warner Chilcott Ltd. (WCRX)

Goldman Sachs is raising its price target on shares of Warner Chilcott Ltd. WCRX to $26 from $25, and has a Neutral rating on shares.

In a note to investors, Goldman writes, "We are increasing our 2011E to 2013E EPS to reflect the recent refinancing of WCRX's term loans and our increased assumptions for prepayment of debt. The refinancing of the term loans lowers the interest rate by roughly 200 bp relative to our previous forecasts. WCRX also reduced debt by $200 million through the process, which follows a $200 million prepayment in January. Given an anticipation of further debt reduction, pending potential deal activity (which we do not model but we think is key to more material upside), we have incorporated higher assumptions for debt repayment through our forecast period. We maintain our Neutral rating but the recent share pull-back and our upward EPS revisions imply a more attractive upside relative to our price target."

Shares of WCRX lost 44 cents yesterday to close at $22.00, a loss of nearly 2%.