Truist Securities initiates Biogen stock coverage with Hold rating

Investing.com - Truist Securities initiated coverage of Biogen (NASDAQ:BIIB) with a Hold rating and a price target of $142.00 on Monday. According to InvestingPro data, the biotech company, currently valued at $18.31 billion, is trading at a P/E ratio of 12.35 and shows signs of being undervalued based on Fair Value analysis.

The research firm downgraded Biogen from the previous Buy rating and lowered the price target from $199.00, citing a "suboptimal growth outlook" for the company’s commercial franchise and a "lack of de-risked potential blockbuster opportunities" in its pipeline. This aligns with InvestingPro data showing 10 analysts revising their earnings expectations downward for the upcoming period, with the next earnings report scheduled for July 31.

Truist Securities expressed diminished optimism about Biogen’s Alzheimer’s disease opportunity and projected modest growth expectations for Leqembi, one of the company’s key products in that therapeutic area.

The firm noted similar modest expectations for Zurzuvae and stated that growth for Skyclarys, another Biogen product, "has plateaued" according to their analysis.

Truist Securities also characterized Biogen’s late-stage development pipeline as "high risk" and suggested that the company’s discounted valuation multiple compared to other large-cap biotech peers is warranted given these factors.

In other recent news, Biogen has announced plans to invest an additional $2 billion into its manufacturing facilities in North Carolina’s Research Triangle Park. This expansion aims to support Biogen’s late-stage clinical pipeline and modernize manufacturing technologies. Meanwhile, analysts have been adjusting their outlooks on Biogen’s stock. UBS raised its price target from $119 to $130, maintaining a Neutral rating, while JPMorgan reiterated its Neutral rating with a $175 price target, projecting second-quarter sales of $2.4 billion and earnings per share of $4.02. RBC Capital maintained its Outperform rating and $208 price target, citing potential growth in Biogen’s immunology and inflammation portfolio. Additionally, Biogen has initiated a Phase 3 clinical trial for felzartamab in treating primary membranous nephropathy, a rare kidney disease. The trial will enroll approximately 180 adults, with results expected in 2029. This marks Biogen’s third Phase 3 trial of felzartamab this year.

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