On Wednesday, Biogen (NASDAQ:BIIB) stock received a boost from Piper Sandler, with the firm raising its price target on the stock to $315 from $307. The investment firm maintained its Overweight rating on the stock, indicating a positive outlook on the company's trajectory.
The price target adjustment follows Biogen's strong performance in the third quarter of 2024 and an upward revision of its full-year 2024 guidance. Despite some concerns over the underperformance of Leqembi in the U.S. market and the fact that a significant portion of the earnings beat was driven by reduced expenses, Piper Sandler expressed confidence in Biogen's strategic direction under CEO Chris Viehbacher.
The firm praised Biogen's efforts to diversify beyond neurology, highlighting the recent acquisition of felza as a step towards this goal. Piper Sandler anticipates that additional deals and progress with Leqembi will contribute to the company's growth and support the stock price. According to the analyst, Biogen's shares are nearing a valuation level that has historically been considered a low point for large-cap biotech stocks.
Following minor updates to their financial model and the partial lapse of a valuation period, Piper Sandler set the new price target for Biogen at $315 per share. The firm's commentary underscores a belief in the ongoing rebuild of Biogen and its potential for continued advancement in the biotechnology sector.
In other recent news, Biogen has been making strides in its operations and strategic initiatives. The company's third-quarter revenue met expectations, with Leqembi's performance standing out, even as Skyclarys fell short of forecasts. Goldman Sachs has maintained its Buy rating on Biogen with a price target of $290.00, citing the company's cost-saving measures that led to higher earnings per share.
Biogen has raised its annual profit forecast, attributing this growth to the launch of new treatments and strategic cost reductions. The company's Alzheimer's Disease drug, Leqembi, has seen a gradual increase in U.S. sales. Additionally, Biogen has appointed Robin Kramer as the new CFO, succeeding Michael McDonnell upon his retirement.
The company recently presented promising results from its Phase 2 trial of felzartamab at the American Society of Nephrology Kidney Week conference. Truist Securities reiterated its Buy rating on Biogen shares, maintaining a price target of $302.00. Meanwhile, BMO Capital Markets maintained its Outperform rating on Biogen's shares, with a price target of $230.00, focusing on the encouraging long-term data from the Phase 2 trial of felzartamab.
InvestingPro Insights
Adding to Piper Sandler's optimistic outlook on Biogen, recent data from InvestingPro provides further context to the company's financial position and market performance. Despite the stock trading near its 52-week low, Biogen maintains a strong financial foundation. The company's market capitalization stands at $26.39 billion, reflecting its significant presence in the biotechnology industry.
InvestingPro Tips highlight Biogen's financial stability, noting that its liquid assets exceed short-term obligations. This financial cushion aligns with Piper Sandler's confidence in the company's strategic direction under CEO Chris Viehbacher. Additionally, analysts predict that Biogen will remain profitable this year, supporting the firm's positive outlook.
The company's P/E ratio (adjusted) of 15.08 for the last twelve months suggests that the stock may be undervalued relative to its earnings, potentially supporting Piper Sandler's increased price target. Biogen's gross profit margin of 76.45% for the same period demonstrates its ability to maintain profitability, which is crucial as it diversifies beyond neurology and pursues new growth opportunities.
For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips for Biogen, providing deeper insights into the company's market position and financial health.
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