Credit Suisse and Deutsche Bank trim target prices on Shire

Analysts at both Credit Suisse and Deutsche Bank dropped their target prices for Shire after the biotech group said its sales would grow in mid-single figures and profits would rise at a more glacial pace.

Credit Suisse kept its 'outperform' rating on Shire but dropped its target price to 4,000p from 4,500p, saying that its enthusiasm for the group came from the view that its immune system franchise, of which it was adding a stronger global commercial focus, and its move to use its current strong cash flow to pay down debt.

The Swiss bank's analysts noted that the target price reduction was purely based on the 3% cut in Shire's 2018 earnings per share projections.

Over at Deutsche, which also dropped its target price to 4,500p from 5,000p, Shire's EPS forecast was cut 5%, citing lower margins due to start-up costs and lower capacity utilisation at its Covington manufacturing facility as its reasoning.

"We remain buyers of the shares given a continued valuation disconnect but are cognizant that there remain limited catalysts in the near-term," analysts wrote.

As of 1440 GMT, shares had gained 0.47% to 3,150.30p.