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What’s the Word on Street for Vertex?

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Analyst recommendations for Vertex

According to a Bloomberg consensus of 24 brokerage firms on September 23, 2016, 66.7% brokerage firms recommend Vertex as a “buy,” and 33.3% analyst issued a “hold” ratings for the company.

After its 2Q16 earnings report on July 27, 2016, 69.6% analysts were bullish on Vertex. Although this number has fallen marginally, VRTX’s consensus target share price has revised from $109.58 to the current level of $110.32.

The above table details 19 brokerage firms and their estimated price for Vertex. The consensus 12-month target price for the company is $110.32, which translates to a ~19.8% return, as compared to Vertex’s closing price of $92.12 on September 22, 2016.

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Peer recommendations

According to the Bloomberg survey of 21 analysts on September 23, 2016, 76.2% issued a “buy” rating for Alexion Pharmaceuticals (ALXN), whereas 19% believed that Alexion should be “hold,” and 4.8% analysts recommended a “sell” for Alexion. Given its consensus price of $169, ALXN presents a return potential of 26.4% over the next year.

According to 19 analyst ratings from the Bloomberg consensus on September 23, 2016, 94.7% believe BioMarin (BMRN) should be a “buy,” whereas 5.3% have issued a “hold” ratings on BioMarin. BMRN presents an opportunity to earn 22.2% over the next year, with a target consensus price of $119.06.

Other peers

The Bloomberg consensus of 27 analysts on September 23, 2016, indicated that 48.1% of analysts apiece have given “buy” and “hold” ratings for Regeneron Pharmaceuticals (REGN), while 3.7% of analysts issued “sell” rating on the stock. With a consensus price of $466.64, REGN presents a return potential of 14.4% over the next 12 months.

These promising business aspects could result in an improved valuation of the company. However, the success or failure of any drug can result in volatility in the stock. To diversify the risks of investing directly in the equity of Vertex Pharmaceuticals, investors can take ETF options such as the PowerShares QQQ (QQQ). The fund has 0.44% of its total assets in Vertex.

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