Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, UBS analysts, led by Ashwani Verma, adjusted the price target for Jazz Pharmaceuticals shares, listed on (NASDAQ:JAZZ), to $166.00 from the previous $179.00. Despite the reduction, the firm continues to recommend a Buy rating for the stock. The analysts cited the recent 15% decline in Jazz Pharmaceuticals' stock over the past two weeks as an opportunity, enhancing the risk/reward balance as the market anticipates the upcoming third-quarter results for the company's GEA product read-out, which is considered significantly de-risked. According to InvestingPro data, the stock's RSI suggests oversold conditions, with shares trading significantly below their 52-week high of $148.06.
The discussion among investors recently has been dominated by topics such as the potential implications of Jazz Pharmaceuticals' Irish domicile, including tax considerations, and tariffs. The analysts noted that Jazz's oxybates are manufactured in Ireland, Epidiolex in the UK, and some oncology assets in Italy. While Jazz Pharmaceuticals has some excess manufacturing capacity in the US, transferring operations is described as potentially cumbersome. The company maintains strong operational efficiency with impressive gross profit margins of 92.36% and a healthy current ratio of 4.46, indicating robust financial health.
The reduction in the price target to $166 is partly due to a lower projected price-to-earnings (P/E) multiple of 6.5 times, down from 7.0 times, applied to the estimated earnings per share (EPS) for the year 2026. This adjustment reflects the trend of contracting multiples across biopharmaceutical peers, suggesting a more cautious industry valuation standard going forward.
Jazz Pharmaceuticals, with its diverse manufacturing presence and recent stock performance, remains a company under close watch by investors, particularly as the market anticipates the forthcoming third-quarter updates.
In other recent news, Jazz Pharmaceuticals has been the subject of several analyst updates and strategic developments. The company disclosed its acquisition of Chimerix (NASDAQ:CMRX), aiming to add the promising drug dordaviprone to its portfolio. This acquisition, valued at $935 million, is expected to finalize by the second quarter of 2025. Analysts from Truist Securities and Needham have raised their price targets to $230 and $210, respectively, citing the acquisition's potential impact on Jazz's financial performance and the promising prospects of dordaviprone. UBS also upgraded Jazz Pharmaceuticals to a Buy rating, increasing its price target to $179, reflecting confidence in the company's base business and the Ziihera pipeline.
Furthermore, RBC Capital Markets made a slight reduction in its price target to $178, maintaining an Outperform rating, while noting the company's strong commercial franchises and market exclusivity for Epidiolex. The firm's sleep franchise and the cannabis-derived drug Epidiolex continue to show robust performance. Additionally, H.C. Wainwright increased its price target to $217, maintaining a Buy rating due to Jazz's strategic acquisition and financial outlook. These recent developments highlight the evolving landscape for Jazz Pharmaceuticals and its strategic efforts to enhance its portfolio and market position.
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