The ‘buy’ call was made on valuation grounds with the stock having fallen 21% since the start of June.
Liberum says the risk of a new Shire competitor in the haemophilia market has now been baked into the company’s valuation as has the prospect of management making further big and potentially tricky acquisitions.
Risks now discounted
“With the stock now below £35, we believe almost the entire value of hemophilia has been discounted from the shares,” Liberum said in a note to clients.
“Furthermore, there are welcome signs that management could re-orient from away from M&A to cash returns as it looks at strategic options for neuroscience.”
It has moved its recommendation to ‘buy’ from ‘hold’, while its price target is £42 a share.
In the afternoon session, stock in Shire had nudged up to 3,573p, a rise of 74p (and mainly the result of the Liberum note).
Of the 17 analysts logged as following Shire by the Broker Forecasts site, 15 hold ‘buy’ recommendations. The remainder see the equity as fully valued. The consensus price target is £49.37.