Key Takeaways
- Biogen shares rose 5% today after BofA raised its price target to $244 from $219 and kept a Neutral rating.
- BofA’s new target is close to the $247 consensus target, which has climbed 43% over the past year as analysts try to keep up with the stock.
- Analysts expect revenue growth of about 6% this year and 2% to 3% a year through 2028, while the forward P/E is near its five-year high.
- Biogen reports third-quarter results on Oct. 28, and the stock needs a reason for analysts to raise their revenue estimates.
Biogen (BIIB) shares are up 5% today after BofA raised its price target on the stock to $244 from $219 this morning, while keeping a Neutral rating. Money also moved into healthcare today, which helped: the sector rose while the Nasdaq fell 3%.
BofA’s analysts said Biogen’s third quarter is “likely to be relatively quiet.”
That makes two target hikes in two days. TD Cowen raised its target to $250 from $225 on Wednesday and kept a Buy rating, as it updated its model ahead of the quarter.
But after today’s jump, Biogen trades above both targets.
Analysts keep playing catch-up
The consensus target has climbed 43% over the past year, from $173 to $247…
…and the stock has now run past it. Targets range from $175 to $310, so the most bullish analyst still sees plenty of room. The average analyst thinks Biogen is worth about what it trades for today.
Slow growth at a full price
The business is growing, just slowly. Second-quarter revenue rose 3% from a year earlier to $2.7 billion. The newer drugs Biogen counts as its growth portfolio did better, bringing in $1.06 billion, up 24%.
Analysts expect about 6% revenue growth this year, then 2% to 3% a year through 2028…
And BofA’s call for a quiet quarter gives no reason to expect those estimates to move much.
Meanwhile, investors are paying close to the most they have in five years for Biogen’s earnings…
The stock traded at 19x forward earnings at Wednesday’s close, against a five-year average of 14x. After today’s move, it’s closer to 20x, right around its five-year high.
TIKR tracks 36 analysts on Biogen. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Biogen, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Biogen’s Analyst Ratings
What it’ll take from here
Biogen reports third-quarter results before the open on Wednesday, Oct. 28. Don’t be surprised by a weak earnings figure: Biogen warned in July that charges for acquired R&D and milestones of $290 million to $320 million would cut its third-quarter EPS by $1.75 to $1.95 per share.
My take: BofA’s hike gave the stock a nice lift. But Biogen already trades above its targets and near its highest multiple in five years, so a quiet quarter won’t carry it much higher. It needs a reason for analysts to raise their revenue estimates.
Of course, another strong quarter from the growth portfolio on Oct. 28 could be exactly that.
So what is Biogen stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Biogen could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
