While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Allergan (NYSE: AGN) popped 2% today after Citigroup upgraded the pharmaceutical giant from neutral to buy.
So what: Along with the upgrade, analyst Liav Abraham boosted his price target to $130 (from $95), representing about 16% worth of upside to yesterday's close. While momentum traders might be turned off by the stock's pullback in recent weeks, Abraham thinks that Allergan is too good to pass up given its strong growth prospects and solid financial position.
Now what: Citigroup sees Allergan as a relatively attractive and timely health care pick. "Following the recent removal of the Restasis and Lumigan overhangs, the fundamental risk-reward profile of AGN has shifted, in our view, with the stock offering the most attractive organic growth profile among the peer group, along with significant balance sheet optionality," noted Abraham. Of course, with Allergan shares trading at a clear P/E premium to larger rivals like Johnson & Johnson and Novartis, much of that bullishness might already be baked into the valuation.