Canaccord cuts Neurocrine Bio stock target to $163, keeps Buy rating

On Friday, Canaccord Genuity adjusted its outlook on Neurocrine (NASDAQ:NBIX) Biosciences stock, lowering the price target to $163 from the previous $172 while maintaining a Buy rating. The revision follows a reevaluation of the company’s sales projections for its leading product, Ingrezza. The company, currently trading at $150.51, has demonstrated strong financial health with an "Overall Great" rating according to InvestingPro metrics, showing robust revenue growth of 25.7% over the last twelve months. Analysts at Canaccord now anticipate Ingrezza sales in 2025 to reach $2.57 billion, a slight decrease from the earlier estimate of $2.66 billion. This new projection aligns with the company’s updated sales outlook range. With a current market capitalization of $15.2 billion and strong profitability indicators, including a gross profit margin of 68%, InvestingPro analysis suggests the stock is currently undervalued, with 14 additional key insights available to subscribers.

Despite the reduced forecast for Ingrezza sales, Canaccord analysts expect the drug to experience mid single-digit growth in the subsequent years, albeit starting from this newly established lower base for 2025. The firm has not made significant adjustments to its sales estimates for Crenessity, another of Neurocrine’s products, and anticipates a potential uptick in sales by the fourth quarter of 2025.

In addition to the sales adjustments, Canaccord has increased its estimates for Neurocrine’s selling, general, and administrative (SG&A) expenses, as well as research and development (R&D) costs for the year 2025. These revisions are projected to persist for several years. Furthermore, the analysts now expect a higher tax rate of 27% annually, up from the previous estimate of 25%.

The report clarified that the updated price target is based on a discounted cash flow (DCF) analysis, which takes into account the aforementioned changes. However, Canaccord’s valuation model does not currently ascribe any value to Neurocrine’s extensive pipeline of products beyond Ingrezza and Crenessity. Despite the lowered price target, the firm’s Buy rating suggests a continued positive outlook on the stock’s potential. This aligns with the broader analyst consensus, as tracked by InvestingPro, showing a strong buy recommendation with price targets ranging from $140 to $192. For deeper insights, investors can access the comprehensive Pro Research Report, which provides detailed analysis of NBIX’s financial health, valuation metrics, and growth prospects.

In other recent news, Neurocrine Biosciences reported full-year 2024 Ingrezza revenues of $2.31 billion, marking a 26% year-over-year increase, but slightly underperforming against both BofA Securities and consensus estimates. The company projects 2025 sales to range from $2.5 to $2.6 billion, a forecast that falls below BofA and consensus expectations. BofA Securities adjusted its outlook on Neurocrine Biosciences, reducing the price target to $179 from $184, while maintaining a Buy rating.

In other developments, Neurocrine Biosciences altered its partnership with Takeda on the AMPA program, now holding full worldwide development and commercialization rights, except in Japan. Stifel analysts maintained a positive outlook, keeping the price target steady at $166.00 and reiterating a Buy rating.

Neurocrine Biosciences also sponsored a supplement in The Journal of Clinical Endocrinology & Metabolism focusing on classic congenital adrenal hyperplasia (CAH), a rare genetic condition. The supplement features eight review articles that delve into the multifaceted challenges faced by individuals with classic CAH.

Oppenheimer reiterated its Outperform rating on Neurocrine Biosciences with a steady price target of $192.00, following a meeting with the company’s management. The firm’s analysts highlighted the recent FDA approval of Crenessity for the treatment of CAH as a pivotal event for the company and patients alike.

Lastly, Neurocrine Biosciences recently shared insights on the challenges of treating classic CAH with traditional glucocorticoids and the promise of new non-GC therapies. The company emphasizes the importance of this development for individuals with CAH and their families, as well as healthcare providers.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.