Celgene Corporation (CELG) Financial Outlook Remains Solid: Cowen

Celgene Corporation (NASDAQ:CELG) presented at JPM this morning, providing guidance updates and top-line FY2016 results. While FY2016 top-line results were slightly below expectations, Celgene updated their 2017 guidance, raising total revenues from $12.7-13B to $13.0-13.4B, with the midpoint in line with consensus (~$13.2 B).

As such, Cowen’s top healthcare analyst Eric Schmidt reiterated an Outperform rating on shares of Celgene, with a price target of $150, which implies an upside of 26% from current levels.

Schmidt commented, “We note that Celgene tends to provide initial guidance that is conservative, and we expect further upwards adjustments to guidance over the course of 2017.”

The analyst continued, “Revlimid ($7.0B in 2016 sales, +20%) looks to have a bright future, including much remaining patent exclusivity and the opportunity to grow penetration and duration in U.S. and ex-U.S. markets based upon newer combinations and label expansions. With support from newer products (Pomalyst, Abraxane, and Otezla) and a bulked up pipeline (GED-0301 for Crohn’s, ozanimod for MS and UC, MEDI4736 for heme malignancies, AG-221 for AML, luspatercept in beta thalassemia/ MDS), Celgene should be able to achieve its 2020 financial targets calling for roughly 20% top- and bottom-line growth.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Eric Schmidt has a yearly average return of 20.2% and a 59% success rate. Schmidt has a 8.4% average return when recommending CELG, and is ranked #74 out of 4350 analysts.

Out of the 28 analysts polled by TipRanks, 24 rate Celgene Corporation stock a Buy, while 4 rate the stock a Hold. With a return potential of 18%, the stock’s consensus target price stands at $140.

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