On Wednesday, Goldman Sachs initiated coverage on Lantheus Holdings (NASDAQ:LNTH) stock, a healthcare company, with a Buy rating and set a price target of $143.00.
According to InvestingPro data, the company maintains an EXCELLENT financial health score, with analysts setting targets ranging from $110 to $166. The firm believes that the market is underestimating the growth prospects of Lantheus's product Pylarify, a diagnostic agent used in PET imaging of prostate cancer.
According to Goldman Sachs, the concerns about Pylarify's growth are overdone, and Lantheus's shares are at an attractive entry point. The company's impressive revenue growth of 24.15% and robust gross profit margin of 64.38% support this view. The analyst's estimates suggest that the company's volume growth will likely compensate for any pricing pressure, leading to a solid growth floor.
The expectations set by Goldman Sachs indicate a low double-digit to mid-teens percentage growth, contrasting with the more conservative consensus for flat sales. For deeper insights into Lantheus's growth metrics and detailed financial analysis, consider accessing the comprehensive Pro Research Report available on InvestingPro.
The firm also highlighted Lantheus's strong position in theranostics and Alzheimer's diagnostics. Despite intensifying competition, Goldman Sachs sees Lantheus's isotope strategy and logistical capabilities as key competitive advantages, potentially enabling Pylarify to gain additional market share.
Looking beyond the immediate future, Goldman Sachs anticipates that Lantheus could evolve into a company with multiple strong facets. The company's strong performance is evident in its year-to-date return of 49.45% and one-year return of 66.65%.
Although outcomes for some of Lantheus's products are still pending, the analyst suggests that the market's view is overly pessimistic, especially concerning PNT2002, a therapeutic candidate in comparison to a competitor's product, Pluvicto. InvestingPro analysis indicates that the stock is currently undervalued based on its proprietary Fair Value model.
Additionally, the potential of Lantheus's diagnostics for Alzheimer's disease was noted as a significant opportunity. The firm believes that Lantheus could tap into a market exceeding $1.5 billion, acting as an essential step between initial blood-based biomarker testing and the commencement of treatment. The new price target reflects a 12-month projection for Lantheus Holdings' stock value.
In other recent news, Lantheus Holdings has reported strong financial performance in its third quarter of 2024, with consolidated net revenue reaching $378.7 million, an 18.4% increase from the same period the previous year.
The company's lead product, PYLARIFY, contributed significantly to this growth, with sales hitting approximately $260 million, a 20% year-over-year increase. Lantheus also reported growth in DEFINITY sales, which totaled $77 million.
In other developments, TD Cowen maintained a Buy rating on Lantheus with a price target of $110.00, despite a recent update from the Centers for Medicare & Medicaid Services (CMS) regarding lower payment calculations for Pylarify. Meanwhile, Leerink Partners reduced their price target for Lantheus to $122.00 from the previous $127.00 but maintained an Outperform rating on the stock.
These recent developments come as Lantheus adjusted its full-year 2024 revenue guidance to a range of $1.51 billion to $1.52 billion, and its forecast for fully-diluted earnings per share for the fiscal year 2024 to between $6.65 and $6.70. The company is also actively transitioning to the Average Sales Price model to mitigate the effects of lower CMS payment rates.
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