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Tuesday Morning’s Market Insights: Twitter Inc (TWTR), Tesla Motors Inc (TSLA), Allergan plc Ordinary Shares (AGN), Intercept Pharmaceuticals Inc (ICPT)

By Shira Gonen

Twitter Inc (NYSE:TWTR) is up over 2% in pre-market trading after Bloomberg reported that it will broadcast NFL games online on Thursday nights. The company outbid Verizon, Yahoo, and Amazon, with Facebook dropping out of the bid last week. As Twitter seeks to become more relevant and vamp up its product, NFL streaming will allow it to attract more users who can live-tweet about the games. On the other hand, the NFL can reach cable cord-cutters as more people switch to streaming videos via the internet.

According to TipRanks, out of the 32 analysts who have rated the company in the past 3 months, 16 gave a Buy rating, 2 gave a Sell rating, and 14 remain on the sidelines. The average 12-month price target for the stock is $23.03, marking a 35% upside from where shares last closed.

Tesla Motors Inc (NASDAQ:TSLA) is down over 3% in pre-market trading after the company reported lower than expected delivery for the first quarter. The company delivered 14,820 vehicles in Q1:16 compared to an expected 16,000 deliveries. The company attributed the miss to parts shortages due to “Tesla’s hubris,” as the company aimed to incorporate too much technology which both the Tesla and its suppliers could not manufacture. The company plans to deliver 80,000-90,000 vehicles this year, though many investors are concerned that the company will not be able to keep up with demand, especially with over 270,000 pre-orders for the Model 3.

According to TipRanks, out of the 18 analysts who have rated the company in the past 3 months, 9 gave a Buy rating, 6 gave a Sell rating, and 3 remain on the sidelines. The average 12-month price target for the stock is $245.94, marking a 0.43% downside from where shares last closed.

Allergan plc Ordinary Shares (NYSE:AGN) is plunging 20% in pre-market trading after the U.S treasury announced new regulations to help prevent tax inversion by corporations, which could potentially impact its merger with Pfizer. The terms of the merger indicate that Pfizer would move its global headquarters to Ireland, where AGN is located, to avoid a higher U.S tax rate while keeping most of its operations in the U.S.  The U.S treasury is aiming to make it more difficult for corporations to move their business overseas for tax purposes. Such measures include increasing debt while lowering nterest, IRS audits, and issuing more filing regulations. Yesterday, the companies stated, “We are conducting a review of the U.S. Department of Treasury’s actions announced today. Prior to completing the review, we won’t speculate on any potential impact.”

Following the news, analyst Shibani Malhotra of Nomura weighed in on the stock, reiterating a Buy rating and $350 price target. She states, “While our previous research suggests that “earnings stripping” is not a major driver of the benefits of the Pfizer/Allergan deal, we are more concerned by specific language in today’s notice that states, “for the purposes of computing the ownership percentage when determining if an acquisition is treated as an inversion under current law, today’s action excludes stock of the foreign company attributable to assets acquired from an American company within three years prior to the signing date of the latest acquisition.” … Most important, we believe that the current stock price does not reflect the standalone value of Allergan and we view AGN shares as compelling even absent a deal with Pfizer.”

According to TipRanks, all 9 analysts who have rated the stock in the past 3 months are bullish. The average 12-month price target for the stock is $344.63, marking a 24% upside from where shares last closed.

Intercept Pharmaceuticals Inc (NASDAQ:ICPT) is up 5% in pre-market trading following the release of the FDA Advisory Committee documents related to drug OCA, which is set for an FDA advisory discussion on April 7. The advisory will discuss the effectiveness of OCA to treat primary biliary cholangitis, a chronic liver disease. The FDA is set to give an approval decision by May 29. If this drug is approved, it will mark Intercept’s first, and both analysts predict millions in revenue. Analysts believe OCA could generate $3.5 billion in revenue per year to treat NASH, a common liver disease. However, new NASH data related to the drug is expected only in 2018.

While the briefing documents were positive, the FDA noted that “While there is no clear difference in hepatic-related adverse events in this phase 3 trial, when all the data are taken into consideration, it is possible that OCA, in particular higher OCA doses, may be associated with an increase in hepatic adverse events.”

According to TipRanks, out of the 10 analysts who have rated the company in the past 3 months, 6 gave a Buy rating while 4 remain neutral. The average 12-month price target for the stock is $202.50, marking a 52% upside from where shares last closed.