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Tuesday, Needham upgraded Neurocrine (NASDAQ:NBIX) Biosciences stock from Hold to Buy, setting a price target of $138, while analyst targets range from $126 to $192. The decision comes after a positive physician survey on the company’s drug Crenessity, used to treat congenital adrenal hyperplasia (CAH). According to InvestingPro data, the company maintains robust financials with a "GREAT" health score and impressive revenue growth of 25% over the last twelve months. Needham analysts predict sales for Crenessity will exceed the consensus by 8-10% for the year 2026 and beyond.
The upgrade reflects confidence in the company’s ability to meet its 2025 revenue guidance of $2.5-2.6 billion, despite first-quarter concerns about the dynamics of its drug Ingrezza. Needham believes the market has overreacted to these concerns, and any impact from potential tariffs should be minimal due to the drug’s high gross margin, which is greater than 98%. The company’s overall gross margin stands at 67.5%, while its strong liquidity position is evidenced by a current ratio of 3.4, indicating solid operational efficiency.
In addition to the upgrade, Needham has increased its sales estimates for Neurocrine Biosciences and adjusted the discount rate to 12.5%, an increase of 50 basis points, to align with current market dynamics. Analysts at Needham expect the company to gain momentum as it provides more visibility into Crenessity’s performance metrics and continues to execute on Ingrezza’s market strategy.
The firm also sees potential for medium-term value creation from Neurocrine Biosciences’ pipeline. This includes developments in muscarinic receptor agonists, with one candidate expected to start phase 3 trials in the first half of 2025 and phase 1 data for other assets anticipated within the year. Additionally, the company has major depressive disorder (MDD) assets, such as osavampator, currently in phase 3 trials.
The positive outlook from Needham indicates a belief in the company’s strategic execution and the potential of its product pipeline to drive growth in the coming years. The upgraded rating and increased price target suggest that Neurocrine Biosciences is well-positioned to advance its clinical programs and expand its market presence. InvestingPro analysis suggests the stock is currently undervalued, with a PEG ratio of 0.83 indicating attractive pricing relative to growth potential. For deeper insights into Neurocrine’s valuation and growth prospects, including 8 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Neurocrine Biosciences announced promising results from a study on INGREZZA, revealing that 59.2% of participants achieved remission of tardive dyskinesia symptoms after 48 weeks. The study, presented at the 2025 Psychiatry Update Conference, showed significant improvement in symptoms across different psychiatric diagnoses. In another development, RBC Capital Markets upgraded Neurocrine Biosciences’ stock rating to "Outperform," citing the strong commercial performance of INGREZZA and its sustainable market presence. Meanwhile, UBS adjusted its price target for the company to $137.00, maintaining a "Buy" rating and noting the favorable risk/reward balance in the current biotech environment. Stifel analysts offered a cautious outlook on the uptake of Neurocrine’s new CAH treatment, Crenessity, particularly in pediatric cases. However, they revised their short-term sales expectations for INGREZZA, aligning with the company’s conservative stance. Additionally, Neurocrine Biosciences appointed Dr. Sanjay Keswani as the new Chief Medical (TASE:BLWV) Officer, succeeding Dr. Eiry W. Roberts. Dr. Keswani brings over 20 years of industry experience and will oversee clinical development and medical affairs.
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