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On Monday, BofA Securities analyst Greg Harrison upgraded United Therapeutics Corporation (NASDAQ:UTHR) from Underperform to Neutral, setting a price target of $314.00 for the company’s shares. According to InvestingPro data, the company maintains excellent financial health with a perfect Piotroski Score of 9 and impressive gross profit margins of 89%. Current analysis suggests the stock is trading below its Fair Value. The revision follows the expectation of first-quarter revenues aligning closely with consensus estimates, forecasting $734 million, which marks an 8% year-over-year increase. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are also anticipated to rise by 5% year-over-year to $392 million, surpassing the Bloomberg consensus of $385 million. The company’s strong financial position is reflected in its last twelve months’ revenue of $2.9 billion and EBITDA of $1.5 billion.
The analyst anticipates that the growth for United Therapeutics will be primarily propelled by Tyvaso-DPI, especially with the rollout of the interstitial lung disease (ILD) indication. The first quarter of 2025 is expected to be the initial full quarter reflecting the net revenue baseline established in late 4Q, following the assimilation of increased Tyvaso payer rebates.
United Therapeutics is also navigating the new mandatory manufacturer discounts under the Inflation Reduction Act (IRA), which imposes a 10% discount in the initial coverage phase and a 20% discount in the catastrophic phase for Part D drugs like Tyvaso-DPI and Orenitram. Despite these new discounts, the impact on United Therapeutics’ financials is predicted to be limited due to the phase-in period designed for smaller manufacturers.
According to BofA Securities, the market may not be fully recognizing the competitive risks to United Therapeutics’ key brands. Nevertheless, the firm has reiterated the Neutral rating based on the company’s valuation and the perceived underestimation of these competitive challenges by the Street. Want deeper insights into UTHR’s competitive position? InvestingPro offers comprehensive analysis with 12 additional exclusive ProTips and detailed peer comparison tools in our Pro Research Report, helping investors make more informed decisions about this healthcare leader.
In other recent news, United Therapeutics Corporation reported its fourth-quarter 2024 earnings, which fell short of expectations. The company posted earnings per share (EPS) of $6.19, missing the forecasted $6.68, and revenue of $735.9 million, slightly below the expected $739.92 million. Despite this, United Therapeutics achieved record annual revenue growth for the third consecutive year, with a 24% increase over 2023. Key products such as Tyvaso and Orenitram showed significant revenue growth of 19% and 28%, respectively.
Goldman Sachs analyst Chris Shibutani adjusted the price target for United Therapeutics to $293 from $302, maintaining a Neutral rating. This revision followed the company’s fourth-quarter results and noted Tyvaso’s underperformance, attributed to contracting challenges and anticipated competition from Yutrepia by LQDA™ in 2025. Despite these challenges, the company continues to advance its pipeline with significant clinical trial progress. The outcomes of the IPF trials, TETON-2 and TETON-1, are viewed as critical for reinforcing confidence in the company’s growth trajectory. United Therapeutics remains optimistic about its future, projecting continued double-digit revenue growth into the mid-decade.
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