Why Allergan, Inc. Rallied Today

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 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.

More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

The article Why Allergan, Inc. Rallied Today originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.