On Monday, Morgan Stanley (NYSE:MS) adjusted its stance on Intra-Cellular Therapies stock (NASDAQ:ITCI), downgrading the rating to Equalweight from Overweight.
This move comes in response to the announcement that Johnson & Johnson (NYSE:JNJ) has agreed to acquire Intra-Cellular Therapies for $132 per share.
The acquisition news has prompted the analysts at Morgan Stanley to reassess their previous rating. In their statement, they noted the reason for the downgrade, "We downgrade our rating on ITCI shares to Equal-weight (from Overweight) and increase our PT to $132 (from $102)."
The new price target of $132 aligns with the acquisition price offered by JNJ, indicating the analysts' view that the stock will reach this value based on the terms of the acquisition agreement. This adjustment reflects the current valuation of Intra-Cellular Therapies based on the proposed buyout price.
Intra-Cellular Therapies is now positioned at a rating that suggests the analysts believe the stock is fairly valued at the proposed acquisition price, hence the change from an Overweight rating, which suggested that the analysts previously saw higher potential for stock performance relative to the market.
The acquisition by JNJ is a significant development for Intra-Cellular Therapies, as it represents a strategic move by a major player in the pharmaceutical industry to expand its portfolio. The updated price target by Morgan Stanley signals confidence in the acquisition agreement's valuation of Intra-Cellular Therapies.
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