On Tuesday, Legend Biotech Corp. (NASDAQ:LEGN) had its price target slightly reduced by H.C. Wainwright to $86 from the previous $87, while the firm reiterated its Buy rating on the shares. This adjustment follows Legend's recent disclosure of its first-quarter financials for 2024.
Legend Biotech reported a total revenue of $94.0 million with $78.5 million coming from collaboration revenue in the first quarter. This performance comes in the context of Johnson & Johnson's Janssen division, which is not rated by the analyst, experiencing a 1% quarter-over-quarter contraction in sales, posting $157 million in the first quarter compared to $159 million in the last quarter of 2023.
This slight fall in sales was attributed to the timing of billing orders versus revenue recognition and slot expansions anticipated to drive higher growth later in the year.
H.C. Wainwright's decision to adjust the price target is based on the roll-forward of their financial model, taking into account the recent performance and future expectations. Despite the minor reduction in the price target, the firm's stance on Legend Biotech remains positive.
The adjustment in the price target to $86 from $87 reflects a nuanced view of Legend Biotech's financial trajectory based on the latest quarterly results and market dynamics. The maintained Buy rating indicates continued confidence in the company's prospects.
InvestingPro Insights
As Legend Biotech Corp. (NASDAQ:LEGN) navigates through its financial year, recent data from InvestingPro provides a detailed look into the company's financial health and market position. With a market capitalization of around $7.93 billion, Legend Biotech's financials indicate significant growth in revenue, reporting an impressive increase of over 231% in the last twelve months as of Q1 2024. This growth is in line with analysts' expectations of a sales surge in the current year, a factor that may have contributed to H.C. Wainwright's positive outlook despite the slight price target adjustment.
However, it's noteworthy that the company's gross profit margins have been weak, with a gross profit margin of -59.15% in the same period. This aligns with the InvestingPro Tip that Legend Biotech suffers from weak gross profit margins. Moreover, the stock has experienced a downward trend over the last month, declining by approximately 18.8%, which could be indicative of market sentiment and the challenges the company faces.
InvestingPro Tips further reveal that Legend Biotech holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations, suggesting a degree of financial resilience. While these factors may provide some comfort to investors, it is also important to consider that analysts do not anticipate the company to be profitable this year, which is reflected in the negative P/E ratio of -17.15.
For those seeking more in-depth analysis, InvestingPro offers additional tips on Legend Biotech, which can be accessed at https://www.investing.com/pro/LEGN. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a total of 11 InvestingPro Tips that can help in making more informed investment decisions.
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