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On Thursday, TD Cowen analysts adjusted their outlook on Biogen (NASDAQ:BIIB) shares, reducing the price target to $200 from the previous $275, while sustaining a Buy rating on the stock. The revision reflects concerns about the company’s future revenue, influenced by a declining Multiple Sclerosis (MS) franchise and slower-than-anticipated new product launches. Currently trading at $133.43, near its 52-week low of $128.51, InvestingPro analysis suggests the stock is undervalued, with a P/E ratio of 12.47 and strong free cash flow yield of 10%.
Biogen recently reported a revenue and earnings per share (EPS) beat for the fourth quarter. However, the company’s guidance for 2025 anticipates a mid-single-digit revenue decline, falling short of the consensus expectations. This projection has been attributed to increasing competition from both branded and generic drugs that is expected to impact Biogen’s MS treatments. Additionally, the introduction of new products is projected to only partially mitigate this decline. InvestingPro data reveals that 9 analysts have revised their earnings downward for the upcoming period, while the company’s revenue has already declined by 3.86% over the last twelve months. Discover more insights with InvestingPro’s comprehensive research report, covering what really matters for this $19.4B market cap biotech leader.
In response to these factors, TD Cowen analysts have recalibrated their estimates to align with the company’s guidance and observed trends. The lowered price target is based on a discounted cash flow (DCF) analysis, which suggests that despite the challenges, Biogen’s stock is undervalued when considering its portfolio of marketed products.
The report from TD Cowen indicates that while Biogen’s stock may be currently undervalued, the company’s newer products have not yet compensated for the losses in its MS franchise. According to the analysts, improved clarity on Biogen’s strategies to achieve top-line growth is likely needed before investors will feel confident in the company’s stock once again.
In other recent news, Biogen has seen a series of changes in stock price targets from various financial institutions. RBC Capital Markets reduced its price target from $231 to $225, maintaining an Outperform rating, emphasizing the company’s strategic changes and potential growth catalysts. Truist Securities followed suit, lowering the target to $210 from $220, while still affirming a Buy rating, focusing on the growth potential of Leqembi, Biogen’s Alzheimer’s treatment.
H.C. Wainwright also adjusted its price target for Biogen, bringing it down to $241 from $300, maintaining a Buy rating, citing a re-evaluation of revenue estimates. BMO Capital Markets expressed concerns over the company’s revenue trajectory and reduced the price target to $139 from $156, maintaining a Market Perform rating. Lastly, Scotiabank (TSX:BNS) reduced its price target to $224 from $244 but maintained a Sector Outperform rating, highlighting the growing market penetration of Leqembi.
These adjustments follow recent developments at Biogen, including its latest financial disclosures and the company’s efforts to streamline operational expenses. Despite facing challenges with its current product lineup, analysts suggest that the market is undervaluing Biogen’s stock and anticipate potential growth catalysts, including progress with Leqembi and favorable business deals.
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