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Shire shares rally after drop on surprise CFO departure news as broker comment reassures

07:04 EDT 22 Aug 2017 | Proactive Investors

Shire Plc (LON:SHP) saw its shares rally today following big falls yesterday afternoon on surprise news its chief financial officer is to quit, helped by reassuring broker comment. The stock dropped 3.5% on Monday after it said Jeff Poulton will leave the FTSE 100-listed drug giant at the end of the year to join Boston-based start-up Indgo Ag, a plant health specialist. READ: Shire seeks European marketing approval for dry eye drops But Shire shares rallied 1.3% higher this morning, up 46.5p to 3,659.5p with Credit Suisse reiterating an ‘outperform’ rating and 5,350p price target on the stock after speaking to Poulton about his departure. In a note to clients, the Swiss bank’s analysts said Poulton told them that his decision to leave was his own as he “has always wanted to work for an emerging start-up business and the platform at Indigo was too appealing to ignore.” They noted that the CFO “recognises that timing is not ideal given investors' uncertainty around ACE-910 and Baxalta integration” but he felt “opportunities like this do not come up often.” The analysts added that Poulton “expects that the company will aim to hire an experienced CFO who will hopefully provide comfort to investors in terms of financial execution and with a reputation for prioritising investor communication.” READ: Shire Pharma says it may spin out neuroscience division; Q2 results ahead of forecast In conclusion, the Credit Suisse analysts said: “We believe that a key issue for Shire will be maintaining a dialogue with investors during the current period of uncertainty. “Both Jeff and Sarah were very important 'faces' of the company. We believe an experienced new hire will be important to provide confidence in financial targets and maintain investor communication.” They added:  “We continue to find the mid-term growth prospects and valuation at Shire as attractive. But we recognise that the launch of ACE-910 (4Q17) and the approval of landelumab (HAE, 2H18) are both important clearing events for the stock.”

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