Healthcare analysts weighed in today with a favorable reports on biopharmaceutical giants Celgene Corporation (NASDAQ:CELG) and Biogen Inc (NASDAQ:BIIB), after the companies released their quarterly earnings reports. Let’s see how things are shaping up for these earnings announcements.
Piper Jaffray analyst Joshua Schimmer reiterated an Overweight rating on shares of Celgene, with a price target of $163, after the company reported fourth-quarter financials in-line with its pre-announcement and reiterated 2016 guidance. However, management distanced itself from prior 2017 guidance, suggesting 2017 numbers may be a bit high.
Schimmer commented, “The company laid out timelines for a number of key P3 data readouts in 2016-2018, a period which will be very rich in newsflow. The company’s PEG ratio is just 0.7 despite strong visibility for sustainable earnings growth through the middle of the next decade. Biotech performance continues to be frustrating during earnings season but we expect this will change as we get deeper into the year and estimates start moving higher.” Furthermore, “While the company waffled on its previously stated 2017 EPS guidance of $7.50/share, we believe it is achievable, but not necessary at the current valuation.”
The analyst continued, “CELG has a number of attractive shots on goal in the pipeline, ranging from label expansion indications for Revlimid and Abraxane, and new product opportunities with Ozanimod for MS/IBS, durvalumab for heme malignancies, luspatercept/sotatercept for anemia, and epigenetic targeting approaches. The pipeline opportunity we are most interested in given its broader lack of awareness, is the CeLMoDs and their potential to expand CELG deep into the cancer immunotherapy field.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer has a yearly average return of -18.9% and a 19% success rate. Schimmer has a -5.8% average return when recommending CELG, and is ranked #3587 out of 3596 analysts.
Out of the 24 analysts polled by TipRanks, 22 rate Celgene stock a Buy, while 2 rate the stock a Hold. With a return potential of 56%, the stock’s consensus target price stands at $152.43.
H.C. Wainwright analyst Andrew Fein reiterated a Buy rating on shares Biogen Inc, with a price target of $360, which represents a potential upside of 34% from where the stock is currently trading.
Fein wrote, “4Q saw an uptick in revenue for Tecfidera, interferon therapies, Eloctate, Alprolix, and flat revenue for Tysabri. The company exited 2015 with cash, cash equivalents, and marketable securities totaling approximately $6.2B, and $6.5B in notes payable and other financing arrangements. Financial guidance for 2016 is as follows: revenue is expected to be in the range of $11.1 to $11.3B; R&D expense is expected to be approximately 19% to 20% of total revenue; SG&A expense is expected to be 17% to 18% of total revenue; non-GAAP diluted EPS is expected to be between $18.30 and $18.60; and GAAP diluted EPS is expected to be between $16.85 and $17.15.”
The analyst concluded, “In line with recent revenue tracking and the company’s guidance forward, we are revising the near-term projections for Alprolix and Eloctate in US (penetration to 12% and to 6% for 2016, respectively) as well as the ROW revenues as proportions of US revenues (to 24% for 2016) to account for: (a) Eloctate approval in the EU and commercialization by Sobi; and (b) pending marketing authorization for Alprolix in EU and higher-than-expected Japan revenue.”
According to TipRanks.com, analyst Andrew Fein has a yearly average return of -3.1% and a 39% success rate. Fein has a -8.9% average return when recommending BIIB, and is ranked #2865 out of 3596 analysts.