Allergan plc. (AGN) Buy or Sell Stock Guide

Last updated: Apr 12, '19

Are you looking for the analysis of Allergan plc. (AGN) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 9 reasons to buy and 5 reasons to sell AGN stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about AGN stock:

  • Is AGN a buy or a sell?
  • Should I sell or hold AGN stock today?
  • Is AGN a good buy / investment?
  • What are AGN analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy AGN stock:

1. Through acquisitions, Allergan has transformed into a major diversified drug manufacturer with a broad patent-protected portfolio and a healthy drug pipeline.

2. Botox continues to dominate the neuromodulator market with almost 75% market share. Few competitors match Allergan’s product portfolio scope, brand recognition, and loyalty programs in the cosmetic market, and recent therapeutic indications introduce Botox to new areas.

3. Allergan's drug pipeline, including biosimilars, holds potentially large growth opportunities.

4. AGN forward dividend yield is 2.01%, higher than the industry (0.15%) and sector (0.13%) forward dividend yields. See AGN forward dividend chart.

5. AGN forward P/E ratio is 8.44, and it’s low compared to its industry peers’ P/E ratios. See AGN forward P/E ratio chart.

6. AGN Price/Book ratio is 0.75, and it’s low compared to its industry peers’ P/B ratios. See AGN forward Price/Book ratio chart.

7. AGN Price/Sales ratio is 3.09, and it’s low compared to its industry peers’ P/S ratios. See AGN forward Price/Sales ratio chart.

8. AGN average analyst rating is Buy. See AGN analyst rating chart.

9. AGN average analyst price target ($188.84) is above its current price ($145.04). See AGN price target chart.

Now that you understand the bull case, let’s look at the reasons to sell AGN stock (i.e., the bear case):

1. Allergan’s future growth depends on the success of products in development, but some high-risk products have faced developmental challenges, such as the anti-VEGF DARPin currently entering Phase III clinical trials.

2. Lower levels of R&D spending compared with peers puts greater pressure on management to supplement growth through acquisitions. Misallocated capital or integration snafus could lead Allergan astray.

3. Allergan's branded drug franchises in women's health, urology, gastrointestinal, and nervous system markets face high levels of generic competition, which erodes pricing power.

4. AGN quarterly revenue growth was -5.70%, lower than the industry and sector average revenue growth (2.00% and 3.10%, respectively). See AGN revenue growth chart.

5. AGN profitability is declining. The YoY profit margin change was -4.95pp. See AGN profitability chart.

Now let's look at the key statistics for AGN:

Metrics AGN
Price $141.52
Average Price Target / Upside $188.84 / 33.44%
Average Analyst Rating Buy
Industry Drug Manufacturers - Specialty & Generic
Sector Healthcare
Number of Employees 16,900
Market Cap $46.33B
Forward P/E Ratio 8.05
Price/Book Ratio 2.93
PEG 2.28
Revenue (TTM) $15.79B
YoY Quarterly Revenue Growth -5.7%
Profit Margin -32.28%

What are your thoughts on AGN?

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