Canaccord cuts Biogen stock price target to $220, maintains buy

On Friday, Canaccord Genuity updated its outlook on Biogen (NASDAQ:BIIB) shares, lowering the price target to $220 from $265, while still recommending the stock as a Buy. Following the release of Biogen’s first-quarter financial results for 2025, the firm’s analysts have adjusted their expectations for the biotechnology company. According to InvestingPro data, the stock currently trades at an attractive P/E ratio of 12x, suggesting potential value for investors. The company maintains a "GREAT" financial health score, supported by strong cash flows and solid profitability metrics.

Biogen reported first-quarter revenues of $2.43 billion and an adjusted earnings per share (EPS) of $3.02, outperforming both Canaccord’s projections of $2.23 billion in revenue and $3.42 EPS and the consensus estimate of $2.23 billion in revenue and $3.92 EPS. Canaccord’s analyst highlighted the company’s robust top-line performance and noted that the EPS was higher than their initial expectations, which did not account for roughly $200 million in acquired in-process R&D or milestone payments.

Despite the positive earnings report, Biogen’s stock has experienced a significant decline, dropping 21% since the start of the year and approximately 50% from its 52-week high of $238 on July 12, 2024. This downturn is largely attributed to concerns over how Biogen will manage competitive pressures affecting its key product franchises. InvestingPro analysis indicates the stock is currently undervalued, with analyst targets ranging from $115 to $260, suggesting potential upside opportunity. For detailed valuation metrics and more insights, check out the comprehensive Pro Research Report available on InvestingPro. While new product launches have contributed to the company’s revenue, they have not quickly offset declines in other areas. Additionally, showcasing cost rationalization has been challenging due to investments in these new product launches.

Canaccord acknowledges the difficulties Biogen has faced, describing the stock’s performance as frustrating. However, the firm believes that the current lower stock price offers an attractive entry point for long-term investors. This positive outlook is based on four key factors: a favorable valuation at approximately 7 times Canaccord’s estimated 2026 EPS for Biogen, the potential for revenue growth, the promising performance of Eisai’s Leqembi (lecanemab) for early Alzheimer’s disease, and the anticipation of significant clinical data in 2026, including Phase 2 results for BIIB080 (an anti-tau Alzheimer’s treatment) and Phase 3 results for litifilimab (for systemic lupus erythematosus).

In conclusion, Canaccord has reiterated its Buy rating on Biogen, expressing confidence in the company’s pipeline and its prospects for future growth. With a market capitalization of $17.7 billion and strong free cash flow yield, the company maintains robust fundamentals despite recent challenges. InvestingPro subscribers have access to over 15 additional exclusive insights and detailed financial metrics that can help inform investment decisions in Biogen and other biotech stocks.

In other recent news, Biogen reported stronger-than-expected earnings for the first quarter of 2025, with earnings per share (EPS) of $3.02, surpassing forecasts of $2.96. The company’s revenue reached $2.43 billion, exceeding the anticipated $2.23 billion, marking a 6% year-over-year increase. Despite the strong financial performance, Stifel analysts maintained a Hold rating on Biogen stock, setting a price target of $144.00. This cautious stance reflects concerns about the company’s near-to-mid-term projections for its lecanemab treatment, despite its better-than-anticipated performance. Biogen also provided guidance for the year, projecting non-GAAP EPS between $14.50 and $15.50, while expecting a mid-single-digit decline in total revenue. The company plans to initiate five phase three studies in 2025, anticipating potential FDA approvals and data readouts that could influence future growth. Biogen’s innovative therapies, particularly in the Alzheimer’s and rare disease markets, continue to bolster its market position despite competitive pressures. The financial analysis by Stifel underscores the complexity of Biogen’s current position, with certain products performing well while underlying challenges may affect future growth and demand.

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