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Investing.com - RBC Capital has raised its price target on Alkermes (NASDAQ:ALKS) to $42.00 from $40.00 while maintaining a Sector Perform rating on the stock. Currently trading at $26.78, InvestingPro analysis suggests the stock is undervalued, with a P/E ratio of 12.57 and strong financial health metrics.
The price target adjustment follows Alkermes’ second-quarter 2025 earnings report released Wednesday morning, which showed strength across the company’s core commercial business with underlying prescription growth and favorable gross-to-net dynamics. The company maintains an impressive 84.42% gross profit margin and holds more cash than debt on its balance sheet. Get deeper insights into Alkermes’ financial performance with a comprehensive InvestingPro Research Report, part of our coverage of 1,400+ US stocks.
RBC Capital noted that the earnings call focused primarily on alixorexton, including discussions about endpoint selection, potential labeling implications, and upcoming data readouts, though limited new details emerged during the discussion.
The firm indicated that Alkermes management expressed confidence regarding secondary endpoints such as cataplexy, the adverse event profile including visual disturbances, and the company’s Phase III development plan for the drug.
Despite positive near-term business performance, RBC Capital characterized Alkermes as a "show-me" story heading into the World Sleep conference, particularly given competitive pressure from Takeda and Centessa in the orexin antagonist market, as well as the threat of generic competition to existing products.
In other recent news, Alkermes reported second-quarter financial results that surpassed analyst expectations, showcasing robust performance across its proprietary product portfolio. The company’s revenue exceeded forecasts by 12%, and Alkermes now anticipates reaching the high end of its guidance range for the full year 2025. Despite these strong results, BofA Securities adjusted its price target for Alkermes from $35 to $33, maintaining a Neutral rating on the stock. This adjustment reflects BofA’s outlook on the company’s growth prospects. Investors may find interest in these developments as they highlight both the company’s current financial strength and the cautious stance of analysts. These updates are part of recent developments concerning Alkermes.
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