Analyst recommendations after 3Q16 earnings
Regeneron Pharmaceuticals (REGN) released earnings for 3Q16 on November 4, 2016. According to the Bloomberg consensus of 26 brokerage firms recorded on November 7, 2016, 46.2% of brokerage firms rated Regeneron as a “buy,” while 50% of broker firms rated the company as a “hold.” 3.8% of firms issued a “sell” rating on the stock.
The above table details 20 brokerage firms and their estimated target price for Regeneron. The consensus 12-month target price for Regeneron is revised to $451.38, which translates to a ~23.4% return compared to Regeneron’s latest price of $365.64 on November 7, 2016. Amid earnings disappointments and growth concerns over Eylea’s revenue, the stock has fallen almost 35% over the past one year.
Perhaps Regeneron’s key to future success lies in its pipeline with Sarilumab for rheumatoid arthritis and Dupilumab with brand name Dupixent for moderate-to-severe atopic dermatitis. For detailed information on Regeneron’s pipeline, please refer to Regeneron’s Robust Pipeline.
Analyst recommendations for peers
As per the Bloomberg survey of 21 analysts on November 7, 2016, 77.3% of analysts issued a “buy” rating for Alexion (ALXN), whereas 22.7% suggested that the stock should be a “hold.” The consensus price of $169.21 translates to a ~40.9% return over the next 12 months compared to Alexion’s latest price of $120.05 on November 4, 2016.
According to a Bloomberg consensus dated November 7, 2016, 72% of analysts surveyed believed that Biogen (BIIB) should be a “buy,” whereas 28% recommended a “hold” for the company. Biogen’s consensus price of $342.3 presents upward potential of 15.8% over a 12-month period based on the latest price of $295.62 on November 4, 2016.
Out of 24 analysts that were part of a Bloomberg survey dated November 7, 2016, 58.3% issued a “buy” rating for Vertex Pharmaceuticals (VRTX), whereas 41.7% recommended that the stock should be a “hold.” With the latest price of $83.22 on November 4, 2016, Vertex presents an opportunity to earn 23.5% given a consensus target price of $102.74.
To avoid the direct risk of investing in a pharmaceutical or biotechnology stock, investors can look for options such as ETFs. ETFs have diverse exposure to various sectors. One such option is the iShares Core S&P 500 ETF (IVV), which holds 0.15% of its total assets in Regeneron.