Piper Sandler cuts Amphastar stock rating, slashes price target

On Tuesday, Piper Sandler adjusted its stance on Amphastar Pharmaceuticals (NASDAQ:AMPH), downgrading the company’s stock rating from Overweight to Neutral and significantly reducing the price target to $36.00 from the previous $66.00. Piper Sandler’s analysts cited increasing competitive challenges that the company faces with its key products, including injectable glucagon and injectable epinephrine, as reasons for the downgrade. According to InvestingPro data, the company maintains strong fundamentals with a healthy gross profit margin of 53% and an impressive return on equity of 24%.

The firm expressed concern about the potential impact of these competitive headwinds on Amphastar’s revenue and EBITDA for the year 2025 compared to 2024. The analysts noted that unless Amphastar’s complex generic products make a substantial contribution to the business this year, the company’s financial outlook could be pressured. However, InvestingPro analysis indicates the company is currently undervalued, with a P/E ratio of 10.2 and strong free cash flow yield, suggesting potential upside despite near-term challenges.

Piper Sandler also pointed out that although Amphastar is pursuing several promising complex generics and biosimilar opportunities, the timeline for these to yield results is unclear. The analysts mentioned that the nature of multi-cycle FDA reviews adds to the uncertainty, emphasizing that the company cannot afford to have its core business significantly affected during this period.

The downgrade comes after Amphastar’s shares have already experienced a considerable decline, falling approximately 36% over the past 52 weeks. Piper Sandler’s analysts acknowledged that their previous outlook on the stock had been incorrect. InvestingPro data reveals the stock is currently trading near its 52-week low of $32.88, with technical indicators suggesting oversold conditions. Subscribers can access 8 additional ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports.

The revised price target of $36.00 reflects Piper Sandler’s recalibrated expectations for Amphastar’s financial performance in the face of the aforementioned challenges. The firm’s analysts have adjusted their valuation to account for the anticipated pressures on the company’s top-line growth and profitability in the near term.

In other recent news, Amphastar Pharmaceuticals has been initiated with an Overweight rating by Wells Fargo (NYSE:WFC), indicating a positive outlook for the company. The financial institution predicts a significant growth phase for the company as it expects Amphastar to launch two to three new products within the next year, potentially expanding its commercial portfolio by more than 50%. Wells Fargo’s analysis also suggests a 20% upside for the company, as it is expected to enter a new product cycle.

Moreover, Amphastar Pharmaceuticals recently held its third-quarter earnings call, led by top executives including Dan Dischner, Senior Vice President of Corporate Communications, Bill Peters, CFO and Executive Vice President of Finance, and Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations. During the call, the company discussed its financial results and made forward-looking statements based on currently available information. No specific financial misses were mentioned during the call.

These are the recent developments for Amphastar Pharmaceuticals. The company’s management provided an outlook for future periods, which included forward-looking statements. These statements are subject to numerous factors that may impact future performance, as indicated in SEC filings and on the company’s website.

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