Bank of America Merrill Lynch Maintains Buy on Forest Labs

Bank of America Merrill Lynch is out with its report today on Forest Labs (NYSE: FRX), maintaining Buy.

In a note to clients, Bank of America Merrill Lynch writes, "FRX faces big revenue and EPS cliffs after Lexapro goes generic in March 2012, but we believe this is largely factored into valuation. In our view, the stock could attract more growth interest after the Lexapro cliff, which will create an EPS trough in F2013, followed by robust EPS growth. We believe base business stability, solid launches of Daliresp and Viibryd, pipeline progress, and smart capital deployment for acquisitions/licensing could help improve sentiment and stock performance."

Bank of America Merrill Lynch maintains a $40 PO on FRX.

Shares of FRX closed Thursday at $39.98, down 0.42% from Wednesday's close.