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Investing.com - Goldman Sachs initiated coverage on UCB SA (BR:UCB) (OTC:UCBJY), a pharmaceutical company with a market capitalization of $38.13 billion and impressive gross profit margins of 71.52%, with a Buy rating and a price target of EUR250.00, citing the blockbuster potential of its Bimzelx drug.
The investment bank views UCB stock as a rare opportunity within European Biopharma, highlighting Bimzelx as transformative for the company with forecasted peak sales of €7 billion across multiple indications. InvestingPro data shows UCB’s strong financial foundation, with a perfect Piotroski Score of 9 and robust revenue growth of 18.72% over the last twelve months.
Goldman Sachs specifically identifies hidradenitis suppurativa (HS) as a key opportunity where Bimzelx could become the market leader due to its clinical data, launch timing relative to competitors, and potential for increasing diagnosis rates.
The firm’s Bimzelx peak sales forecasts are 12% ahead of consensus, with expectations that the drug will drive UCB’s revenue growth from €5.3 billion in 2023 to €12 billion by 2033, while EBITDA is projected to grow fourfold from €1.3 billion to €5.2 billion during the same period.
This growth profile significantly exceeds the peer group average, which Goldman Sachs believes justifies a premium valuation for UCB stock.
In other recent news, Morgan Stanley (NYSE:MS) has upgraded UCB SA’s stock rating from Equalweight to Overweight. This decision is based on a positive sales outlook for Bimzelx, UCB’s treatment for plaque psoriasis. The investment bank has also increased its price target for the company from EUR200.00 to EUR220.00. Morgan Stanley projects that UCB will experience a superior top-line growth, estimating an EBITDA compound annual growth rate of approximately 22% from 2025 to 2028. This is significantly higher than the roughly 10% expected for its sector peers. UCB is currently trading at about 16 times its FY’25 EV/EBITDA, which represents a 33% premium compared to specialty pharma peers. The premium valuation is attributed to UCB’s promising growth outlook and pipeline potential. Despite acknowledging U.S. policy challenges, Morgan Stanley suggests that positive earnings revisions and the potential resolution of sector headwinds could lead to around a 40% valuation upside for UCB.
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