On Tuesday, RBC Capital Markets updated its outlook on shares of Ligand Pharmaceuticals (NASDAQ:LGND), slightly increasing the price target to $141.00 from the previous $140.00. The firm maintained its Outperform rating on the stock.
Currently trading at $122.70, LGND has shown remarkable strength with a 71.8% gain year-to-date. InvestingPro analysis indicates the stock is trading near its 52-week high of $129.90, with analyst targets ranging from $125 to $157.
The adjustment comes ahead of Ligand Pharma's Investor Day, scheduled for December 10 in Boston, where the company is expected to present its 2025 guidance and provide updates on its long-term outlook. According to InvestingPro data, the company maintains an impressive financial health score of GREAT, with particularly strong cash flow metrics and a robust current ratio of 12.49, indicating excellent liquidity position.
RBC Capital anticipates that Ligand Pharma will report 2025 total revenue of $188 million, slightly above the FactSet consensus of $183 million. The firm also projects an adjusted core earnings per share (EPS) of $6.06 for the same year, which is marginally higher than the FactSet consensus of $6.03.
The upcoming Investor Day is also expected to offer insights into the key products in Ligand Pharma's royalty portfolio and updates on the company's deal pipeline. The current guidance from Ligand Pharma forecasts 2028 royalty revenue to exceed $250 million, which would represent approximately a 25% compound annual growth rate (CAGR) over five years.
Moreover, the company predicts an adjusted core EPS of more than $10 per share, including future investments. RBC Capital's revised price target of $141 reflects an update based on the ValueAct consensus revenue for the underlying drugs in Ligand Pharma's portfolio.
Investors and analysts will be looking closely at the Investor Day presentation for confirmation of these forecasts and any additional strategic initiatives that might impact the company's growth trajectory. With current revenue of $152.42M and a P/E ratio of 48.66, detailed analysis of LGND's valuation and growth prospects is available through InvestingPro's comprehensive research reports, which provide deep-dive analysis of 1,400+ top stocks.
In other recent news, Ligand Pharmaceuticals Inc. reported a significant 58% increase in total revenue year-over-year for the third quarter of 2024, and raised its revenue forecast for the year.
Successful product launches and FDA approvals, including Verona Pharma (NASDAQ:VRNA)'s Ohtuvayre and Merck (NS:PROR)'s CAPVAXIVE, are expected to contribute substantially to future royalty revenues. The company maintains a strong cash position with $220 million in cash and short-term investments.
In terms of future plans, Ligand is evaluating 25 potential investments, each with an average targeted investment size of $30 million to $40 million. These strategic acquisitions, focused on late-stage and commercial assets, are anticipated to sustain the company's growth. The firm's Captisol, a solubility enhancer with 16 approved products, continues to hold a strong market position.
These recent developments highlight Ligand's robust financial health and strategic market approach. The company expects long-term royalty revenue growth at a compound annual rate of over 22%. An Investor Day is scheduled for December to provide an updated long-term outlook.
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