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BioMarin: Why So Many ‘Buy’ Recommendations?

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Nov. 20 2020, Updated 4:03 p.m. ET

BioMarin’s analyst recommendations

According to a BioMarin Pharmaceutical (BMRN) press release, the company will report earnings for 2Q16 on August 4, 2016. A Bloomberg consensus of 20 brokerage firms recorded on July 26, 2016, reflects that “buy” ratings for BioMarin, a California-based company, has increased to 94.7% from 90% on June 29, 2016. About 5.3% of brokerage firms rated it a “hold.”

A positive sentiment in the Market after Roche’s rumored interest in BioMarin might be one of the reasons behind more “buy” ratings. To understand why BioMarin has become a Wall Street favorite, please refer to Inside BioMarin’s Big Plans for 3Q16 and Understanding the Valuation Catalysts for BioMarin in 4Q16.ANR

The above table details 17 brokerage firms and their estimated prices for BioMarin. The consensus 12-month target price for BioMarin is $112.10. This leads to a ~20.8% return compared to BioMarin’s closing price of $92.79 on July 26, 2016.

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Analyst recommendations for peers

According to a Bloomberg survey of 21 analysts on July 26, 2016, 76.2% of analysts issued a “buy” rating for Alexion Pharmaceuticals (ALXN), and 23.8% suggested that the stock should be a “hold.” With a consensus price of $179.72, Alexion presents an opportunity to earn 41% over a one-year period.

Following 17 analysts’ ratings from a Bloomberg consensus dated July 26, 2016, 82.4% believed Shire (SHPG) should be a “buy,” and 17.6% suggested a “hold” rating for the company. Shire’s consensus price of $245.69 presents the upward potential of 26.9% over a 12-month period.

A Bloomberg consensus of 27 analysts recorded on July 26, 2016, indicated that 51.9% of analysts issued “buy” rating for Regeneron (REGN), and 44.4% recommended a “hold.” About 3.7% of analysts suggested a “sell” rating on the stock. Regeneron presents an opportunity to earn 17.2% given a consensus target price of $466.82.

Any direct investment in stocks is risky. To mitigate the risk, you can look for options such as the BanEck Vectors Biotech ETF (BBH). BioMarin accounts for 5.0% of BBH’s total holdings.

In the next part of the series, we’ll look at BioMarin’s expected performance in 2Q16.

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