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Roche: shares rise after broker upgrade

(CercleFinance.com) - Roche shares rose on Friday after Bank of America-Merrill Lynch upgraded the Swiss biopharmaceutical giant from "neutral" to "buy".

BofA-ML said that the share's underperformance relative to its sector over the past year, due to biosimilar overhang and a paucity of pipeline data, have created a "floor" valuation.

"Visibility on exact US biosimilar erosion rates (...) and pipeline progression (...) should allow PE re-rating, in our view, as investors look to a post cliff period," the broker pointed out in a research note on the European pharma industry.

BofA-ML has added the stock as a "top-pick" and has raised its target price from 300 Swiss francs to 320 Swiss francs.

Roche shares are currently up 0.6% at 270.5 Swiss francs in Zurich, outperforming the SMI index, which is down 0.5%.

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