UBS cuts Neurocrine Bio. stock target to $154, maintains Buy rating

On Monday, UBS analyst Ashwani Verma adjusted the price target for Neurocrine Biosciences (NASDAQ:NBIX) to $154 from the previous $176, while continuing to recommend the stock as a Buy. Currently trading at $118.82, the stock has seen an 18.31% decline over the past week. The reduction in the price target follows a significant 20% decline in the company’s shares on Friday, prompted by the lower-than-anticipated guidance for Ingrezza and the lack of substantial updates on Crenessity. According to InvestingPro data, analyst targets range from $140 to $192, with a strong buy consensus rating of 1.56.

Verma commented on the recent stock performance, indicating a belief that the market reaction might be overstated. "We believe valuation is very appealing at current levels and the sell-off is overdone," Verma stated. The revised price target reflects a more conservative growth trajectory for Ingrezza, Neurocrine’s lead product. InvestingPro analysis suggests the stock is currently undervalued, with RSI indicators pointing to oversold territory. Subscribers can access 8 additional ProTips and comprehensive valuation metrics.

Despite the reduced expectations for Ingrezza, the analyst expressed confidence in the stock’s potential for future gains. Verma’s outlook suggests that the concerns surrounding Ingrezza are exaggerated and that the anticipated launch of Crenessity could still provide a significant boost to the company’s performance.

The updated price target is based on the adjusted forecast for Ingrezza’s growth ramp-up. However, Verma maintains that the investment appeal of Neurocrine Biosciences remains strong, with the current valuation seen as attractive and the potential for outperformance still present.

Neurocrine Biosciences experienced a notable drop in share value at the end of the previous week, which was influenced by the company’s guidance for its key product, Ingrezza, falling short of market expectations. This event also led to heightened investor attention towards updates on Crenessity, a product in the company’s pipeline, which did not receive a meaningful update during the same time.

In other recent news, Neurocrine Biosciences has seen several adjustments to its stock price targets following its fourth-quarter sales report. Guggenheim maintained a Buy rating but lowered the price target to $163, citing Ingrezza sales slightly below consensus estimates and earnings expectations. Similarly, H.C. Wainwright also maintained a Buy rating but adjusted the price target to $185, noting Ingrezza’s revenue growth and future potential despite increased competition.

BofA Securities and Canaccord Genuity analysts also revised their price targets to $179 and $163, respectively, while maintaining Buy ratings. They attributed the changes to the company’s slightly lower-than-expected sales and revenue guidance for Ingrezza. Meanwhile, Cantor Fitzgerald maintained its Overweight rating with a consistent price target of $170, suggesting potential growth and value creation.

These recent developments followed Neurocrine Biosciences’ announcement of approximately $615 million in Ingrezza sales for the fourth quarter of 2024, slightly below market consensus. The company also reported promising early performance for its newly launched drug, Crenessity, and expressed confidence in its clinical pipeline. Despite the challenges, analysts from various firms expressed continued confidence in Neurocrine Biosciences’ long-term potential.

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