On Monday, Citi reaffirmed its Buy rating on UCB SA (Euronext Brussels:UCB) stock with a steadfast price target of €161.00. The optimism from the firm is rooted in the potential growth of UCB's products and pipeline, despite the company's shares nearing the target price.
Citi highlighted the upside risks to their sales expectations for UCB's Bimzelx/Rystiggo, which could surpass the forecast with €4.2 billion and €1.0 billion in peak sales, respectively.
The firm's analysis also recognizes the value in UCB's pipeline, which could yield peak sales of €3 billion against a forecast research and development expenditure greater than €22 billion.
Additional positive factors for UCB's outlook include recent developments such as Biogen (NASDAQ:BIIB) returning the biosimilar Cimzia rights to Xbrane. Moreover, UCB has the opportunity to reclaim the Japan rights for Cimzia from Astellas in 2026, which could further benefit from the commercial infrastructure established for Bimzelx. The bull-bear valuation presented by Citi ranges between €224 and €109.
In the United States, the launch trajectory for Bimzelx/Rystiggo is showing promising trends, with transaction records (TRx) performing well compared to its peers.
European market data from IQVIA indicates that Bimzelx's sales in April 2024 exceeded €20 million, with projections for 2024 exceeding €300 million. Citi's peak sales estimate for Bimzelx stands at €4.2 billion, while the consensus is at €5.1 billion.
Looking ahead into the second half of the year, Citi anticipates the unveiling of pipeline optionality, although it holds no expectations for dapirolizumab, which is currently in a Phase III lupus trial. Citi projects compound annual growth rates (CAGRs) for UCB's sales, EBITDA, and EPS from 2024 to 2029 at 11%, 27%, and 33%, respectively.
In other recent news, UCB SA has seen its shares target upped by both Barclays and Citi, reflecting a positive outlook for the company's growth prospects. Barclays increased its price target for UCB from €150.00 to €160.00, maintaining an Overweight rating.
This decision was influenced by the robust performance of UCB's recent product launches and an upward revision in the company's financial projections for the fiscal years 2024 to 2026. However, Barclays expressed caution regarding a potential sales decline in the first half of 2024.
InvestingPro Insights
UCB SA (Euronext Brussels:UCB) continues to be a company of interest for investors, with a market capitalization of $30.46 billion and a significant presence in the pharmaceutical industry. According to InvestingPro data, UCB's revenue over the last twelve months as of Q2 2024 has grown by 6.71%, reflecting the company's ability to increase its sales. Additionally, the company's gross profit margin stands at an impressive 67.8%, indicating strong profitability in generating revenue from its products.
InvestingPro Tips highlight that UCB has maintained its dividend payments for an impressive 45 consecutive years, which may appeal to income-focused investors. Furthermore, the company has raised its dividend for 15 consecutive years, demonstrating a commitment to returning value to shareholders. With analysts predicting UCB will be profitable this year and a high return over the last year, the company's financial health appears robust. For those looking to delve deeper, InvestingPro offers numerous additional tips for UCB at Investing.com/pro/UCBJY.
Despite a high earnings multiple with a P/E ratio of 116.79, the company's stock has experienced a significant price uptick over the last six months, with a 83.2% return. This performance is echoed by a strong return over the last year of 93.4%, suggesting that the market has confidence in UCB's growth prospects. With the next earnings date set for October 29, 2024, investors will be keen to see if the company's financial trajectory aligns with the optimistic growth expectations set by analysts and market observers.
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