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Do Analysts See Any Upside for Vertex Stock?

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Dec. 20 2018, Updated 7:30 a.m. ET

Analysts’ recommendations

Of the 25 analysts covering Vertex Pharmaceuticals (VRTX), 21 recommend “buy” or a higher rating, and four recommend “hold.” Their mean rating for Vertex stock is 1.84, and their target price is $201.82, implying a 23.5% upside for the stock based on its December 18 closing price of $163.43.

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Peers’ ratings

In comparison, analysts have given Amgen (AMGN), Biogen (BIIB), and Pfizer (PFE) mean ratings of 2.33, 2.03, and 2.72, respectively, and target prices of $204.80, $388.35, and $44.15.

Vertex’s current ratio, which shows how effectively it can meet its short-term obligations, is 3.70x. In comparison, Amgen’s, Biogen’s, and Pfizer’s current ratios are 3.10x, 2.70x, and 1.40x, respectively.

Stock performance

After rising from $147.50 on June 27 to a high of $192.74 on September 28, Vertex stock corrected to $159.76 on November 20. Initial buying interest then took it to $184.65 on December 3 before the stock corrected again. It currently stands at $163.40.

Vertex’s long-term debt-to-equity ratio is 0.20x, whereas Amgen, Biogen, and Pfizer have debt-to-equity ratios of 2.05x, 0.43x, and 0.47x, respectively.

In fiscal 2018 and fiscal 2019, Vertex’s free cash flow is expected to be $778.63 million and $1.12 billion, respectively, compared with $745.52 million in fiscal 2017. Its price-to-free-cash-flow ratio is 36.12x, while Amgen’s, Biogen’s, and Pfizer’s ratios are 17.65x, 10.41x, and 25.57x, respectively.

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