Investors cautious as key talks between Greece and its creditors take placeLeading shares slipped from a five month high as investors nervously awaited the outcome of the latest talks between Greece and its European creditors.Among the fallers, AstraZeneca lost 82.5p to 4468.5p after a US court declared its patent for Pulmicort Respules - a treatment for asthma symptoms in children - as invalid late on Friday. The company said it strongly disagreed with the decision and was reviewing its legal options, including a possible appeal. It said the ruling did not affect patents in other countries. But rival Actavis immediately launched its generic version of Pulmicort Respules following the court decision. Since its all-time high reached on 8 December 2014 of 183p, the share price has declined by 11% while the company should deliver strong earnings growth in 2015-16 and we revised up our estimates in our 2 February luxury thematic report Globe-trotting shopper. The recent share price weakness puts the stock valuation at an attractive level, Jimmy Choo is now trading at a 7% discount versus global listed peers’ average which looks attractive given the 36% and 20% earnings per share growth we expect in 2015 and 2016 respectively (versus 18% and 13% sector average). We believe this provides a good entry-point for this fast growing company.Friday’s collapse in the share price on concerns that the group was no longer in talks, highlights the fragility of sentiment at bwin.party. However, it also means the risk reward is now more evenly balanced, hence our move to hold. This will deliver additional cash ($3m now and $6m in milestones), provides a potential commercialisation partner and adds new geographic markets (the US and Argentina as well as Brazil). This deal de-risks investment in new products and validates the technologies being developed. We have incorporated the additional cash and reduced our risk factor on the soy pipeline. This increases our risked target price to 70p (from 50p) with our unrisked value unchanged at 102p. This takes Plant Impact from being an attractive speculative investment to a serious player in crop enhancement with material upside. Continue reading...
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