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BioMarin stock target raised on strong guidance

Published 2024/09/05, 17:04
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Piper Sandler adjusted its price target for BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), increasing it to $122 from $107, while maintaining an Overweight rating on the stock. This revision follows the company's Investor Day, which took place on Tuesday, where BioMarin provided long-term guidance exceeding market expectations.

BioMarin's Investor Day revealed the company's forecast for 2027, with anticipated revenue of approximately $4 billion and an operating margin in the low-to-mid-40% range. This projection suggests a non-GAAP EPS of about $6.11-$6.84, surpassing the consensus estimate of $5.89 and Piper Sandler's own estimate of $5.83. The updated guidance has been incorporated into Piper Sandler's financial model for BioMarin.

During the event, BioMarin also shared more details about its pipeline, including timelines for its prioritized assets. These assets include treatments for Duchenne muscular dystrophy (BMN 351), Alpha-1 antitrypsin deficiency (BMN 349), and achondroplasia and hypochondroplasia (BMN 333 and Voxzogo, respectively). The firm has incorporated the potential of Voxzogo in hypochondroplasia into its model, following recent developments.

Piper Sandler's analyst noted that with the strategic review details now available, their positive outlook on BioMarin's shares remains strong. The price target increase to $122 per share reflects this sentiment and stays consistent with the firm's valuation methodology.

In other recent news, BioMarin Pharmaceutical Inc. reported a record total revenue of $712 million, exceeding anticipated figures, and raised its full-year revenue guidance to between $2.75 billion and $2.825 billion. The company has set ambitious financial goals for 2027, including a revenue target of $4 billion and Non-GAAP Operating Margins reaching the low-to-mid 40% starting with 40% in 2026. BioMarin also announced executive transitions, with Dr. Greg Friberg succeeding Dr. Henry J. Fuchs as the new Executive Vice President, Chief Worldwide Research and Development Officer, and James Sabry appointed as the new Executive Vice President, Chief Business Officer.

Scotiabank further increased BioMarin's stock target to $95, maintaining a Sector Perform rating, while Truist Securities revised the price target for BioMarin, decreasing it to $118 but maintained its Buy rating. Bernstein SocGen Group also maintained a positive outlook, reiterating an Outperform rating.

BioMarin's strategic planning includes a comprehensive plan to reduce expenses by $500 million, significantly improving operating margins in the coming years. The company's strategy emphasizes growth across three business units: Enzyme Therapies, Skeletal Conditions, and ROCTAVIAN®, projected to drive a targeted mid-teen Compounded Annual Growth Rate through 2034.

InvestingPro Insights

Following Piper Sandler's optimistic revision of BioMarin Pharmaceutical Inc.'s (NASDAQ:BMRN) price target, InvestingPro data and tips further underscore the company’s promising financial outlook. BioMarin's market capitalization stands at a robust $17.11 billion, and the company has shown a healthy revenue growth of 15.83% over the last twelve months as of Q2 2024. This growth trajectory is consistent with the company's ambitious revenue forecast for 2027 presented during their Investor Day.

InvestingPro Tips highlight that BioMarin is expected to see net income growth this year, with 13 analysts revising their earnings upwards for the upcoming period, reinforcing the positive sentiment shared by Piper Sandler. Additionally, the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting that the stock may be undervalued given its growth prospects. This aligns with Piper Sandler's price target increase, as BioMarin's fundamentals seem to provide a solid basis for the stock's potential upside.

For investors seeking more detailed analysis, InvestingPro offers additional insights, including the fact that BioMarin operates with a moderate level of debt and has liquid assets that exceed short-term obligations, which may provide further confidence in the company's financial health. There are 12 more InvestingPro Tips available for BioMarin, offering a comprehensive understanding of the company's financial position and future potential.

The combination of Piper Sandler's updated price target and InvestingPro's data and tips provides a multi-faceted view of BioMarin's investment potential, suggesting that the company's strategic initiatives and financial metrics are aligning to create shareholder value.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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