On Thursday, Piper Sandler adjusted its stance on Biogen (NASDAQ:BIIB) stock, downgrading it from "Overweight" to "Neutral" and significantly reducing the price target to $138 from the previous $315. The reevaluation comes as the firm assumes coverage of the biotechnology company, which currently trades near its 52-week low of $145.07 and has a market capitalization of $22.28 billion. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.
Biogen is currently navigating a period of transformation, focusing on developing its Alzheimer’s disease (AD) treatments while simultaneously investing in immunology research and development. The company is placing emphasis on lupus, particularly with the development of dapilozumab pegol for systemic lupus erythematosus (SLE). However, the research firm notes that these efforts are still some distance from yielding profitable results.
The firm's analysis suggests Biogen faces a challenging revenue outlook. Royalty streams and the company’s multiple sclerosis (MS) treatments, which are projected to constitute over 60% of its 2024 top-line revenue, including Ocrevus royalties, are expected to diminish further. This anticipated decline in MS-related revenue is a key factor in the reassessment of the company's stock value.
Piper Sandler's revised price target reflects a fair valuation of Biogen shares based on an enterprise value to estimated 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple of approximately 8 times. The firm's commentary indicates a cautious view of Biogen's near-term prospects, acknowledging the company's efforts but recognizing the hurdles it faces in the market.
In other recent news, Biogen has been the subject of various analyst adjustments. BMO Capital Markets downgraded the biotech firm from "Outperform" to "Market Perform," citing slower revenue growth for Alzheimer's treatment, Leqembi, and other challenges. Similarly, Jefferies downgraded Biogen from "Buy" to "Hold," highlighting concerns over the Leqembi treatment and a potential decline in Ocrevus royalties.
On a positive note, Baird increased its price target for Biogen to $300, following the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) positive reexamination recommendation for lecanemab, a treatment for early Alzheimer's disease. Furthermore, the CHMP of the European Medicines Agency has recommended approval for lecanemab, a drug developed by Eisai and Biogen for Alzheimer's disease, after a previous negative opinion was re-examined.
Citi initiated Biogen coverage with a neutral rating and a $190 price target, reflecting a cautious stance on the company's financial outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.