On Wednesday, Morgan Stanley (NYSE:MS) analysts adjusted their stance on Ipsen SA (EPA:IPN:FP) (OTC: IPSEF), downgrading the stock from Equalweight to Underweight. The firm also set a new price target of EUR120.00 for the pharmaceutical company. The downgrade was attributed to Ipsen’s projected soft earnings growth compared to its peers, with Morgan Stanley forecasting a 9% growth for Ipsen over the period from 2025 to 2028, versus a 16% average for the sector.
The analysts noted that while there is potential for near-term earnings improvements driven by Ipsen’s Somatuline, a drug used in the treatment of acromegaly and gastrointestinal and pancreatic neuroendocrine tumors, these are not expected to significantly boost the stock’s performance. This is mainly due to the slow momentum of new product launches within Ipsen’s portfolio, which may limit the company’s growth prospects.
Despite acknowledging that Ipsen’s valuation appears reasonable, Morgan Stanley suggested that investors might find more attractive opportunities elsewhere within the pharmaceutical sector. The firm pointed out that the lack of major catalysts expected in 2025 could further dampen investor enthusiasm for Ipsen shares.
The downgrade reflects Morgan Stanley’s view that, in comparison with its industry counterparts, Ipsen may face challenges in achieving higher valuation multiples and attracting investor interest. This assessment is based on the current outlook for the company’s earnings and the anticipated pace of its product launches.
Ipsen SA is a global biopharmaceutical group focused on innovation and specialty care. The company develops and commercializes medicines in oncology, neuroscience, and rare diseases. Ipsen’s commitment to discovering new solutions for targeting debilitating diseases and improving the quality of life for patients is a key part of its strategy. However, according to Morgan Stanley’s analysis, the company’s near-term prospects may not align with the more dynamic growth patterns observed in other pharmaceutical firms.
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