Tuesday, CFRA raised the price target on POINT Biopharma Global Inc. (NASDAQ:PNT) to $105 from the previous $100, while reiterating a Hold rating on the shares. The adjustment follows POINT Biopharma's third-quarter results, which saw the company's earnings per share (EPS) climb 16% year-over-year to $1.09, surpassing the consensus estimate by $0.02.
The firm's updated 12-month target price is based on valuing the company at 21.8 times its projected 2025 EPS of $4.80, which aligns with the prior forecast. The analyst noted that the 2024 EPS projection was slightly increased by $0.02 to $4.27. This valuation is above POINT Biopharma's historical average, and the analyst believes a higher multiple is justified due to the company's successful diversification beyond its short-cycle pools business.
Despite a modest decline in revenues, which fell 2% year-over-year (or 1% excluding foreign exchange impacts), POINT Biopharma's third-quarter performance was bolstered by margin expansion. This growth helped to offset a decrease in sales, which was attributed to the company's markets that are sensitive to interest rates and continue to face challenges.
Looking ahead, the analyst expects POINT Biopharma to return to top-line growth in 2025, as anticipated interest rate cuts are predicted to improve the overall demand environment. Additionally, optimism surrounds the sales of new PFAS filtration products, which are expected to benefit from increased regulatory focus on water quality.
The Hold rating is maintained by CFRA as the analyst suggests that the current share price already factors in the anticipated recovery by 2025.
InvestingPro Insights
POINT Biopharma Global Inc. (NASDAQ:PNT) has shown resilience in its financial performance, as reflected in the recent CFRA analysis. InvestingPro data provides additional context to the company's current position. As of the last twelve months ending Q2 2024, POINT Biopharma reported a revenue of $4.11 billion, with a quarterly revenue growth of 1.55% in Q2 2024. This aligns with the article's mention of a modest revenue decline but suggests a potential turnaround in the most recent quarter.
The company's profitability metrics are noteworthy, with a gross profit margin of 38.03% and an operating income margin of 20.35% over the last twelve months. These figures support the article's observation of margin expansion offsetting sales challenges.
InvestingPro Tips highlight that POINT Biopharma has a high return on invested capital, which is consistent with the company's ability to maintain profitability despite market headwinds. Additionally, the company's stock has outperformed the S&P 500 in the past year, with a remarkable 55.51% price total return over the last 12 months.
For investors seeking a deeper understanding of POINT Biopharma's potential, InvestingPro offers 16 additional tips that could provide valuable insights into the company's financial health and market position.
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