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Investing.com - BNP Paribas (OTC:BNPQY) Exane has initiated coverage on Zealand Pharma A/S (NASDAQ:ZEAL) with an Outperform rating and a price target of DKK905.00. According to InvestingPro data, the company, currently valued at $4 billion, shows promising fundamentals with a strong current ratio of 25.1x and moderate market risk with a beta of 0.56.
The research firm’s coverage comes as Zealand Pharma shares have declined more than 60% from their peak, trading at $56.46, significantly below its 52-week high of $153.55. This decline comes despite the company securing a partnership deal with Roche and seeing reassuring incremental datasets from competitors on amylin’s potential. InvestingPro analysis suggests the stock is currently undervalued, with analysts maintaining a strong buy consensus.
BNP Paribas Exane notes that Zealand’s first-half performance has closely mirrored Novo Nordisk (NYSE:NVO), which has faced challenges following disappointing CagriSema (GLP-1/amylin combo) data, with shares further de-rating mid-year in response to positive competitor datasets shared at the American Diabetes Association conference. Despite recent challenges, InvestingPro forecasts impressive revenue growth of 146.5% for FY2025, suggesting strong recovery potential. Get access to 12+ exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
The price target of DKK905 represents over 100% upside potential from current levels, based on the firm’s DCF-derived valuation using an 8.6% weighted average cost of capital and 1.5% growth rate. The company maintains a "FAIR" financial health score according to InvestingPro metrics, with a solid P/B ratio of 2.99x.
BNP Paribas Exane expects Zealand shares to trade closer to their fundamental value as the market increasingly recognizes amylin as both a combination partner and alternative option for patients discontinuing GLP-1 treatment, accepts obesity market segmentation, and approaches the first half of 2026 when several material readouts for Zealand are expected. With analyst targets ranging from $76.62 to $176.93, investors can access detailed valuation analysis and more through Zealand’s comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Zealand Pharma has reported its Q1 2025 financial results, highlighting a revenue of 8 million DKK, primarily driven by its Segalog license agreement with Novo Nordisk. The company anticipates a significant upfront payment of $1.4 billion from Roche in Q2 2025, which is expected to bolster its cash position substantially. Zealand Pharma has maintained strategic collaborations to strengthen its pipeline in obesity treatments, including a transformative partnership with Roche. In a recent Phase 1b trial, Zealand Pharma’s dapiglutide demonstrated an 11.6% mean body weight reduction over 28 weeks, with the treatment being well-tolerated. Deutsche Bank (ETR:DBKGn) has adjusted its price target for Zealand Pharma to DKK485, maintaining a Hold rating, while Cantor Fitzgerald reaffirmed its Overweight rating, citing potential sales from the Roche collaboration. The company has also announced minor delays in the development of dapiglutide and survodutide, though these are not expected to materially impact timelines. Overall, these developments reflect Zealand Pharma’s active role in advancing its therapeutic offerings and strategic partnerships in the competitive pharmaceutical landscape.
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