H.C. Wainwright Raises Price Target for La Jolla Pharmaceutical Company; Here’s Why
H.C. Wainwright's healthcare analyst Reni Benjamin came out today with a research report on La Jolla Pharmaceutical Company (NASDAQ:LJPC), following the company’s fourth-quarter financial results and update on its pipeline. The analyst reiterated a Buy rating on the stock and increased the price target to $29 (from $20), which implies an upside of 31% from current levels.
Benjamin explained, "By applying a 28x multiple to our probability adjusted 2022 revenues of $510 MM, we obtain a $21 target price. Our revenues estimate for GCS-100 now assumes a higher (12%) penetration in to the diabetic CKD patient population. Applying a 28x multiple to our probability adjusted 2022 earnings per share of $6.51, we obtain a price target of $30. By averaging the two and adding the projected cash per share, we obtain a 12-month price target of $29."
Bottom line, "Based on the clinical profile to date, the portfolio of diverse assets, the potential to secure an ex-US partnership, and a cash position of $41.8 MM (pro forma), we believe La Jolla Pharmaceutical represents an undervalued player with significant upside for the long-term investor."
According to TipRanks.com, which measures analysts' and bloggers' success rate based on how their calls perform, analyst Reni Benjamin has a total average return of 10.5% and a 40.6% success rate. Benjamin has a 130.0% average return when recommending LJPC, and is ranked #602 out of 3535 analysts.