Stock Strategist: Concerns About Allergan's Health Are Overblown

[Morningstar Logo]( [Company Site]( [Company News]( [Membership]( [Portfolio]( [Stocks]( [Options]( [Funds]( [ETFs]( [Markets]( [Tools]( [Personal Finance]( [Discuss]( Stock Strategist Concerns About Allergan's Health Are Overblown The stock price implies the worst-case scenario for this wide-moat company. [tab_bar] by Michael Waterhouse | 1/12/2018 1:00:00 PM We think three primary factors have weighed on [Allergan]( [AGN]( stock price: concern about generics’ effects on a few of the company’s products, apprehension regarding new competition, and skepticism of the pipeline. While these are valid concerns, we think the current stock price overly penalizes Allergan and ignores the company’s wide economic moat and long-term positives. We forecast a slowdown in Botox’s therapeutic and cosmetic sales from the launch of calcitonin gene-related peptides in migraine and new competition from products like Revance’s [RVNC]( RT002 in the aesthetics market. However, like Botox’s resilience against previous neuromodulator competition, we think Botox and the remainder of Allergan’s attractive aesthetics business will remain a long-term growth driver for the company. We also continue to think the market ignores the company’s innovative pipeline even though several products are high risk/high reward. It’s hard to gauge when sentiment may change, especially with uncertainty about the exact timing of a generic Restasis launch, but we view the stock’s valuation as too pessimistic. We think Allergan represents an attractive opportunity for patient, long-term investors. To read more, click [here](. Sponsored Links [Buy a Link Now]( New: ETF Managed Portfolios Center On [MorningstarAdvisor.com]( Tap into the industry's best source of information on ETF strategies for financial advisors. See key performance data, screen for specific strategy attributes, and learn more about this fast-growing area of the investment marketplace. [Click to get started](. Free Issue | Morningstar's Stock Newsletter >> Morningstar StockInvestor is celebrating more than 10 successful years of high-quality stock investing. Its two real-money portfolios have outperformed the S&P 500 since 2001. [Get new ideas for the core of your stock portfolio]( ). Search Most Recent Articles [How Self-Driving Cars Will Change Cities: The View From CES]( [Nominees for 2017 Domestic-Stock Fund Manager of the Year]( [Will 2018 Be Another Up Year for Stocks? Readers Say Yes]( Latest Analyst Reports [Urban Outfitters]( [Exelon]( [Grupo Televisa]( [Netflix]( [Lennar]( ABOUT OUR EMAIL TO UNSUBSCRIBE this email address to the Stock Strategist newsletter, please click "reply" and then click "send." This will unsubscribe only this email address to this specific newsletter. All subscription changes will take effect within one business day. Replies are not read by individuals, so please do not use this for queries about Morningstar.com. If you have questions about Morningstar.com or your membership, send a note to [joe@morningstar.com](mailto:%20joe@morningstar.com). ABOUT OUR PRIVACY POLICY Please [click here]( to learn about Morningstar's privacy policy. (c) Copyright 2018. Morningstar, Inc. 22 West Washington Chicago, Illinois, 60602 All rights reserved.