/Biogen%20Inc%20logo%20on%20laptop-by%20monticello%20via%20Shutterstock.jpg)
Based in Cambridge, Massachusetts, Biogen Inc. (BIIB) discovers, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases. Valued at a market cap of $30 billion, the company is also developing products for the treatment of various other diseases, including Alzheimer's disease and dementia, neuromuscular disorders, Parkinson's disease, and movement disorders.
Shares of this biotechnology company have significantly underperformed the broader market over the past 52 weeks. BIIB has declined 21.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 28.5%. In 2024, shares of MSI are down 20.4%, compared to SPX’s 17.7% gain on a YTD basis.
Zooming in further, BIIB has also lagged behind the iShares Neuroscience and Healthcare ETF’s (IBRN) 13.2% gain over the past 52 weeks and 1.6% decline on a YTD basis.
Biogen’s underperformance is driven by disappointing news for Leqembi, the company’s Alzheimer's Drug, which was turned down by the European drug regulators and dragged its stock into the red. Moreover, the stock fell 1.2% on Aug. 1 after its Q2 earnings report, despite beating Wall Street’s revenues and earnings estimate. This was primarily due to lower demand for key multiple sclerosis (MS) drugs like Tecfidera and Tysabri, which was partially offset by higher revenues from new drugs coupled with a decline in contract manufacturing and royalty revenues.
For the current fiscal year, ending in December, analysts expect BIIB’s EPS to grow 9% year over year to $16.05. 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.
Among the 29 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 18 “Strong Buy” ratings, two “Moderate Buys,” and nine “Holds.”
Overall, the configuration has remained fairly steady over the past months.
On Aug 2, RBC Capital Markets maintained an “Outperform” rating on BIIB and raised the price target to $292, noting the company's Q2 performance and assuming a positive trajectory for the company despite the market's initial reaction.
The mean price target of $270.81 represents a premium of 31.5% to BIIB’s current levels. The street-high price target of $342, implies an impressive potential upside of 66.1% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
