Shares of Allergan (AGN) are slipping after Goldman Sachs analyst Jami Rubin downgraded the stock to Neutral, citing its recent run, peaking margins and a lack of near-term catalysts. Last night, the company reported better than expected first quarter results and raised its 2017 outlook.

RESULTS: Allergan reported last night first quarter adjusted earnings per share of $3.35 and revenue of $3.57B, both above consensus estimates of $3.30 and $3.54B, respectively. The Botox-maker also raised its 2017 adjusted earnings per share view to $15.85-$16.35 and revenue forecast to 15.8B-$16B. The new outlook reflects management's current belief about prescription trends, pricing levels, inventory levels and the anticipated timing of future product launches and events, the company noted.

MOVING TO THE SIDELINES: Despite the beat-and-raise quarter, Goldman Sachs' Rubin downgraded Allergan to Neutral from Buy on the belief that margins are peaking and near-term catalysts are lacking. In a research note this morning, the analyst pointed out that the stock has had a "solid run" this year. Although Rubin acknowledged that the pipeline is not priced in the stock's valuation, he does not expect de-risking data readouts until the second half of 2018, which he sees as necessary to drive multiple expansion. Margins have been under pressure for a few quarters now, he noted, adding that he believes margin expansion potential is more limited than anticipated medium-term. The analyst has a $262 price target on the shares.

PIPELINE CATALYSTS NEXT UPSIDE DRIVER: While Credit Suisse analyst Vamil Divan lowered his price target for Allergan to $274 from $281 following yesterday's quarterly results, he reiterated an Outperform rating on the shares. The analyst noted that the company reported a top- and bottom-line beat, and incorporated the recently completed Zeltiq acquisition when boosting 2017 sales expectations. However, Divan pointed out that there was some confusion on Allergan's comments. The company continues to assume operating cash flow in the range of $1.5B-$2.0B per quarter, although it fell short of this in the first quarter given the impact of acquisitions and may fall short again in the second quarter, he contended. Additionally, the analyst believes investor focus will begin to shift to important pipeline catalysts starting in the second half of 2017, such as the Vraylar label expansion for use in negative symptoms of schizophrenia, data for the oral CGRPs atogepant and ubrogepant as well as initial Phase 3 data for abicipar in age-related macular degeneration.

PRICE ACTION: In morning trading, shares of Allergan have dropped over 3% to $231.14.