China smartphone shipments slumped in June on inventory overhang: Jefferies
On Wednesday, JPMorgan shifted its stance on UCB SA (Euronext Brussels: UCB) (OTC: UCBJY) stock, upgrading the pharmaceutical company from Neutral to Overweight. The firm also increased UCB's price target to €200.00, up from the previous €150.00. This decision comes in the wake of UCB's shares climbing by 22% since the beginning of June.
The analyst from JPMorgan highlighted UCB's growth potential, noting an expected compound annual growth rate (CAGR) in earnings per share (EPS) of 31% from 2024 to 2027.
This rate surpasses the projected growth for the European MidCap Pharma/Biotech Sector, which is estimated at 19% for 2025-2028, and 21% versus the sector's 14% for the same period. Despite the recent performance, the analyst believes that UCB's growth profile is still not fully appreciated by the market.
UCB's stock is currently trading at only 22 times the projected 2025 core EPS and 17 times the 2026 estimate, which is considered low compared to the sector averages of 17 times and 14 times, respectively.
The analyst expects that the de-risking of UCB's growth, particularly with the anticipated U.S. approval of additional uses for the drug Bimzelx and its subsequent launch for Hidradenitis Suppurativa (HS), will propel the shares in the next 12 to 18 months.
Furthermore, the JPMorgan analyst pointed out that while much of UCB's pipeline is considered high risk and is not currently factored into market valuations, upcoming decisions on the further development of Atopic Dermatitis treatments UCB9741 and UCB1381 could provide additional growth.
These potential developments have not been included in current forecasts but could extend the duration of UCB's growth and lead to future upgrades, thus contributing to the stock's performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.