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New York-based Regeneron Pharmaceuticals, Inc. (REGN) discovers, develops, manufactures, and commercializes medicines for treating serious medical conditions. Valued at a market cap of $81.1 billion, the company’s portfolio consists of nine marketed drugs, which are Eylea, Dupixent, Praluent, Kevzara, Libtayo, Evkeeza, Inmazeb Arcalyst and Zaltrap. It also developed an antibody cocktail for COVID-19 called REGEN-COV.
Shares of this biotech company have significantly lagged behind the broader market over the past 52 weeks. REGN has declined 6.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 31.3%. Moreover, on a YTD basis, the stock is down 14.7%, compared to SPX’s 25.5% gain.
Narrowing the focus, REGN’s underperformance becomes more evident when compared to the Health Care Select Sector SPDR Fund’s (XLV) 10.9% gain over the past 52 weeks and 6.6% return on a YTD basis.
On Nov. 15, REGN and Sanofi (SNY) announced that the FDA had accepted their supplemental biologics license application (sBLA), which was resubmitted to seek approval of Dupixent for the treatment of chronic spontaneous urticaria (CSU).
On Oct. 31, shares of REGN plunged 9.2% despite reporting better-than-expected Q3 earnings results. Though its revenue increased 11% annually to $3.72 billion and surpassed the Wall Street estimates of $3.67 billion, the company’s lighter-than-expected sales of its new eye disease drug, Eylea HD, disappointed the investors and led to its downward price movement. REGN’s adjusted earnings of $12.46 per share improved 8% from a year ago and outpaced the consensus estimates of $11.75.
For the current fiscal year, ending in December, analysts expect REGN’s EPS to increase marginally year over year to $37.85. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
However, among the 27 analysts covering the stock, the consensus rating is a “Strong Buy,” which is based on 19 “Strong Buy,” one “Moderate Buy,” six “Hold,” and one “Moderate Sell” rating.
On Nov. 7, Oppenheimer maintained an “Outperform” rating on REGN and lowered its price target to $1,000, which indicates a 33.4% potential upside from the current levels.
The mean price target of $1,060 and the Street-high price target of $1,300 suggest notable upside potentials of 41.4% and 73.4%, respectively.
