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On Wednesday, Deutsche Bank (ETR:DBKGn) upgraded Ipsen SA (EPA:IPN:FP) (OTC: IPSEY) stock from Hold to Buy, increasing the price target to EUR122.00 from EUR116.00. The upgrade comes as InvestingPro data shows the company trading near its 52-week low, with strong fundamentals including an impressive 82.7% gross profit margin. Stifel analysts cited the pharmaceutical company’s consistent trading near its current valuation over the two-year period from 2023 to 2025. They noted that the market conversation has largely focused on the potential decline of Ipsen’s drug Somatuline and whether new assets such as Bylvay, Cabo, Iqirvo, and Dysport can stimulate growth beyond this decline.
The analysts expressed their expectation for Ipsen SA to break away from the trend observed in the past two years. The new price target of EUR122.00 suggests an upside of approximately 13% and is based on an 11.5 times projected 2025 P/E ratio. According to InvestingPro analysis, the company maintains a "GREAT" overall financial health score and is currently undervalued based on its Fair Value calculations. The upgrade reflects a positive outlook on the company’s ability to achieve growth with its launched assets, supported by an expected 6% revenue growth forecast for FY2025.
Ipsen SA’s stock performance has been under scrutiny, with the main concern revolving around the competition for Somatuline, a key product in the company’s portfolio. Somatuline is used for the treatment of neuroendocrine tumors and acromegaly, and its market position is vital for Ipsen’s financial health.
The company’s newer products, Bylvay, Cabo, Iqirvo, and Dysport, are expected to be significant contributors to Ipsen’s future revenue streams. Bylvay is used for the treatment of pruritus in patients with progressive familial intrahepatic cholestasis, Cabo (cabozantinib) for various cancers, Iqirvo for pediatric growth hormone deficiency, and Dysport for muscle spasticity and wrinkles.
Deutsche Bank’s upgrade suggests confidence in Ipsen SA’s strategic direction and product pipeline. The firm’s analysts believe that the company’s recent launches will help to offset any negative impact from Somatuline’s market challenges and propel the company into a new growth phase. InvestingPro data reveals the company’s strong financial position, with a healthy free cash flow yield of 8% and a 19-year track record of consistent dividend payments. InvestingPro subscribers have access to 10 additional key insights about Ipsen’s financial health and growth prospects.
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