U.S. stocks rise on Fed cut bets; earnings continue to flow
On Wednesday, TD Cowen adjusted its outlook on Halozyme Therapeutics (NASDAQ:HALO), increasing the price target to $79.00, up from the previous $77.00, while reiterating a Buy rating on the stock. The revision follows a robust first-quarter performance that surpassed expectations in both revenue and earnings, with the company reporting impressive 22.4% year-over-year revenue growth and maintaining a strong gross profit margin of 76.5%. This performance, deemed particularly notable amidst current challenges facing the broader biopharmaceutical industry, has contributed to the company’s $7.3 billion market capitalization.
Halozyme’s financial success has been attributed in part to strong royalty income, driven by the performance of drugs such as Darzalex and Phesgo, as well as the outperformance of Vyvgart Hytrulo. According to InvestingPro analysis, the company boasts a perfect Piotroski Score of 9, indicating exceptional financial strength, and appears undervalued based on its Fair Value assessment. These factors have not only contributed to the company’s current success but have also led to an upward revision of its fiscal year 2025 guidance. This bolstered forecast has played a significant role in the firm’s decision to raise the price target.
The research firm’s analyst, Brendan Smith, highlighted the company’s recent achievements as indicative of a near best-case scenario for Halozyme. Smith pointed out that the raised guidance for the future, coupled with the company’s solid performance, supports the new price target, which sees a modest increase of $2.
Looking ahead, TD Cowen believes there is additional upside potential for Halozyme, citing several factors that could further enhance the company’s value. These include ongoing product launches, share buyback programs, and the potential outcomes of litigation with Merck (NSE:PROR) (known as MRK in reference to its stock ticker). InvestingPro subscribers can access 10 additional expert tips and a comprehensive Pro Research Report, providing deeper insights into Halozyme’s financial health, valuation metrics, and growth prospects. According to Smith, these elements collectively reinforce Halozyme’s position as a top pick within the sector.
In summary, the latest assessment by TD Cowen underscores a positive outlook for Halozyme Therapeutics, backed by a combination of strong quarterly results, promising drug performances, and strategic corporate activities that are expected to drive future growth and shareholder value. The company’s attractive PEG ratio of 0.27 suggests significant growth potential relative to its current valuation.
In other recent news, Halozyme Therapeutics Inc. reported a strong performance for the first quarter of 2025, surpassing earnings and revenue expectations. The company achieved an earnings per share (EPS) of $1.11, exceeding the forecasted $0.98, and reported revenues of $265 million, beating the expected $229.29 million. Halozyme’s revenue increased by 35% year-over-year, driven by a 39% rise in royalty revenue to $168 million. The company also raised its full-year revenue guidance to a range of $1.2 billion to $1.28 billion. Notably, Halozyme’s product portfolio, including the DARZALEX subcutaneous formulation, contributed significantly to its financial success. Analysts from firms such as Wells Fargo (NYSE:WFC) and Morgan Stanley (NYSE:MS) have shown interest in the company’s strategic focus on growth through acquisitions and innovative drug delivery technologies. Halozyme is also navigating ongoing patent litigation with Merck, but management expressed confidence in their legal position. The company remains committed to expanding its market opportunities and maintaining its leadership in drug delivery platforms.
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