TSX runs higher on rate cut expectations
On Thursday, Truist Securities adjusted its outlook on Lantheus Holdings (NASDAQ:LNTH), reducing the price target to $117 from the previous $127, while still recommending the stock as a Buy. The revision follows Lantheus’ first quarter performance, which indicated a slight miss in PYL (PyLuminate) sales. According to InvestingPro data, the stock has experienced a significant 24% decline over the past week, with technical indicators suggesting oversold conditions.
Truist Securities analysts noted that the company’s first-quarter results, which showed a marginal miss in PYL sales compared to consensus, have historically led to an overreaction in the stock price. They pointed out that such quarters have previously created buying opportunities after significant sell-offs, referencing the recent 23% decline in Lantheus shares. The analysts believe that the market has undervalued the company’s growth potential, pricing the stock as if it were reflecting a worst-case scenario for PYL sales. This view aligns with InvestingPro’s analysis, which shows strong fundamentals including a healthy 64.4% gross margin and robust return on equity of 33%.
The report from Truist Securities highlights that Lantheus is trading at less than 11 times price-to-earnings (P/E) ratio, which they consider a mispricing considering the company’s high single-digit to double-digit revenue and earnings per share (EPS) growth projections for 2026 and beyond. Current InvestingPro data shows a P/E ratio of 29.69x, with the stock currently trading below its Fair Value, suggesting potential upside opportunity. Despite the downward adjustment in the EPS forecast for 2026 to $7.45 from the prior figure of $7.60, the analysts see a path to low single-digit organic revenue re-acceleration in the second half of 2025 and approximately 8% in 2026. InvestingPro subscribers have access to 12 additional key insights about Lantheus, including detailed valuation metrics and growth indicators.
The analysts also addressed the lowered PYL outlook, which is now at 1.5% compared to the previous estimate of around 4%. This adjustment is expected to extend the period during which negative assumptions about PYL cannot be disproved. However, Truist Securities maintains a positive long-term view, considering the second half of 2025 to be a pivotal period for Lantheus’ story. The company’s financial health remains strong, with InvestingPro reporting a current ratio of 5.52x and moderate debt levels, supporting its ability to navigate through this transitional period.
In other recent news, Lantheus Holdings Inc . announced its Q1 2025 earnings, which fell short of analyst expectations for both earnings per share (EPS) and revenue. The company reported an EPS of $1.53, missing the anticipated $1.64, and revenue of $372.8 million, below the forecasted $377.79 million. Despite these financial setbacks, Lantheus remains focused on product innovation and strategic acquisitions to drive future growth. The company recently completed the acquisition of Evergreen Theranostics and plans to finalize the acquisition of Life Molecular Imaging shortly. Additionally, Lantheus announced an agreement to divest its SPECT business to Shine Technologies, a move aimed at streamlining operations and focusing on PET diagnostics and radiotherapeutics. The company provided a revenue guidance range of $1.55 billion to $1.585 billion for 2025, with an adjusted EPS guidance of $6.60 to $6.70. Analysts from firms such as Mizuho Financial Group (NYSE:MFG) have shown interest in Lantheus’ strategic direction, particularly regarding the divestiture and acquisition activities. These developments highlight Lantheus’ efforts to enhance its radiopharmaceutical leadership and sustain long-term growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.