Tuesday, UBS increased its stock price target on UCB (UCB:BB) (OTC: UCBJY) to EUR135.00 from EUR125.00, while keeping a Buy rating on the stock. The firm's decision to raise the price target is based on the anticipated revenue growth following the approval of a health solution, referred to as HS.
The new stock price target suggests an 11% potential upside for the pharmaceutical company's shares. UBS's valuation model, known as the APV analysis, remains underpinned by a weighted average cost of capital (WACC) of 8.1% and a beta of 0.86, which have not been adjusted in this latest analysis.
The upgrade in the revenue forecast for the period between 2024 and 2026 is attributed to the recent HS approval. Furthermore, UBS has increased its sales expectations for the drug Bimzelx beyond 2026, now projecting peak sales to reach EUR5.1 billion, up from the previous estimate of EUR4.7 billion.
The firm's analysts believe that UCB is currently in a rapid growth phase and possesses the potential to generate strong earnings momentum. This outlook supports their decision to maintain a Buy rating on the company's stock.
UCB's stock performance and investors' expectations will likely be influenced by the company's ability to meet these revised revenue targets and capitalize on the growth opportunities identified by UBS.
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