H.C. Wainwright lifts Jazz stock target to $217, maintains Buy

On Tuesday, H.C. Wainwright updated its financial outlook on Jazz Pharmaceuticals (NASDAQ:JAZZ), increasing the price target to $217 from the previous $200 while maintaining a Buy rating on the company’s shares. The revised target follows Jazz’s recent announcement of its 2025 guidance, which revealed significant R&D savings and operating margin potential above market consensus.

Last week, Jazz Pharmaceuticals, currently valued at $8.35 billion, disclosed the acquisition of Chimerix (NASDAQ:CMRX), which is expected to add the drug dordaviprone to its portfolio. Dordaviprone is a promising treatment for H3 K27M-mutant midline glioma, a rare type of brain tumor primarily affecting pediatric and adolescent and young adult (AYA) patients. Currently, there are no approved treatments for this condition, and the prognosis after standard-of-care radiation is poor. According to InvestingPro analysis, Jazz maintains a healthy current ratio of 4.46x, indicating strong financial flexibility for such strategic acquisitions.

Chimerix had surprised markets in December by announcing plans to submit a New Drug Application (NDA) to the FDA based on Phase 2 data, despite a Phase 3 study still being in progress. The application includes a request for a Rare Pediatric Priority Review Voucher (PRV), which could provide added value to Jazz if granted.

Analysts from H.C. Wainwright anticipate further details from Jazz Pharmaceuticals regarding the launch strategy, international market plans, and ongoing Phase 3 trials after the acquisition is finalized, which is expected by the end of the second quarter. They suggest that the $935 million acquisition price, potentially less than $800 million net of any PRV value, represents a good value for Jazz. They base this on a modest 9.5x EBITDA multiple on the 2028 contribution from the acquisition, which could be worth approximately $1.1 billion before considering potential revenue from markets outside the U.S.

The updated price target and continued Buy rating reflect the firm’s positive outlook on Jazz Pharmaceuticals’ strategic acquisition and its potential to significantly impact the company’s financial performance. Trading at a P/E ratio of 15.17x with a substantial free cash flow yield of 16%, InvestingPro analysis suggests the stock is currently undervalued. For deeper insights into Jazz’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Jazz Pharmaceuticals reported its Q4 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $6.60 and revenue reaching $1.1 billion. This represents a significant achievement as both figures exceeded forecasts, with revenue marking the highest ever for the company. Truist Securities has increased its price target for Jazz Pharmaceuticals to $230, following the company’s announcement of its intention to acquire Chimerix in a $935 million cash transaction, anticipated to close in the second quarter of 2025. UBS has also upgraded Jazz Pharmaceuticals’ stock rating to Buy, with a new price target of $179, citing confidence in the company’s base business and the potential of its Ziihera pipeline. Meanwhile, RBC Capital Markets adjusted its price target slightly to $178, maintaining an Outperform rating but expressing caution about the company’s long-term growth due to a quieter pipeline and upcoming CEO transition. Needham raised its price target to $210, highlighting positive developments such as the Epidiolex settlement and financial guidance aligning with consensus estimates for 2025. These recent developments indicate a dynamic period for Jazz Pharmaceuticals, with strategic acquisitions and pipeline advancements expected to influence its financial performance.

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