Bernstein raises Vertex stock target to $462 on market resilience

On Tuesday, Bernstein analysts adjusted their outlook on Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), increasing the price target from $445.00 to $462.00. The firm maintained a Market Perform rating on the biotechnology company’s stock. As a prominent player in the biotech sector with a market capitalization of $113 billion, Vertex has demonstrated remarkable stability with a beta of 0.51 and achieved a 24% return year-to-date. The revision reflects minor changes to their estimates and an increased valuation multiple, acknowledging the premium investors are willing to pay for Vertex’s resilience against sector-level challenges.

William Pickering of Bernstein SocGen Group noted that Vertex’s core cystic fibrosis (CF) business appears more robust than recent headlines might suggest. Despite Vertex missing consensus estimates by 2% on revenue and 3% on earnings in the first quarter of 2025, due to temporary headwinds outside the United States, Pickering remains focused on the company’s long-term prospects. According to InvestingPro, the company maintains strong financial health with a current ratio of 2.69 and operates with moderate debt levels. The analyst pointed out that while the revenue for Alyftrek missed targets by 42%, amounting to $54 million, and Journavx revenue was not significant enough to quantify, the launches of these drugs are still in early stages.

Pickering highlighted that the prescription data for Alyftrek and Journavx looked promising, despite the earnings miss potentially giving critics more ammunition. He specifically mentioned Journavx’s commercial challenges but suggested that broader factors such as insulation from tariffs and FDA disruptions, along with Vertex’s reputation as a safe haven within the biotech sector, could continue to support the stock.

Vertex’s stock price target increase is partly based on adjusted valuation multiples, with the enterprise value to sales (EV/S) multiple for 2026 being raised to 9x from the previous 8x, and the price to earnings (P/E) ratio for the same year going up to 25x from 22.5x. Currently trading at an EV/EBITDA multiple of 24.9x, InvestingPro analysis suggests the stock is fairly valued. These adjustments reflect Bernstein’s view that the market will recognize Vertex’s ability to navigate through industry headwinds. For deeper insights into Vertex’s valuation and 12+ additional ProTips, including exclusive financial health scores and comprehensive analysis, explore the full Pro Research Report available on InvestingPro.

In other recent news, Vertex Pharmaceuticals Incorporated reported its first-quarter 2025 earnings, which fell short of both earnings per share (EPS) and revenue projections. The company’s revenue for the quarter was $2.77 billion, missing the forecast by $90 million, while EPS came in at $4.06, below the expected $4.26. Despite this, Vertex raised the lower end of its revenue guidance for 2025, now anticipating $11.85 billion to $12 billion for the year. Analysts from Stifel and Scotiabank (TSX:BNS) have both maintained their ratings on Vertex, with Stifel reiterating a Hold rating and Scotiabank adjusting its price target to $442 from $450 due to the earnings miss. Leerink Partners downgraded Vertex from "Outperform" to "Market Perform," reducing its price target to $503, influenced by tempered expectations for the company’s pain management drug, Journavx. Additionally, Vertex’s cystic fibrosis drugs, Alyftrek and Trikafta, underperformed in sales, with Alyftrek generating $54 million, missing targets by $40 million, and Trikafta sales impacted by issues outside the U.S. Vertex is also progressing with its pipeline, including treatments for diabetic peripheral neuropathy and other conditions, which analysts suggest could significantly impact the company’s future valuation.

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