On Monday, UBS reiterated its Buy rating on BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) with a steady stock price target of $119.00. The firm anticipates that the first quarter will be pivotal for the company, with a focus on any updates regarding its strategic review. UBS highlighted BioMarin's base business and potential expansion of its Voxzogo treatment as underappreciated aspects of the company's value.
Ahead of BioMarin’s first quarter earnings release scheduled for April 24, investors are expected to pay close attention to any commentary on the company's ongoing strategic operational review and potential cost reductions.
UBS has projected first quarter revenues at $638 million, which is slightly below the consensus estimate of $655 million. The variance is attributed to the fluctuating ordering patterns inherent in BioMarin's international rare disease business.
BioMarin’s products, Voxzogo and Roctavian, are expected to generate $152 million and $5 million in revenue respectively for the first quarter, which aligns with the consensus estimates. While there has been caution around Roctavian due to its slow initial uptake, any increase in sales is likely to be received positively by investors.
UBS predicts non-GAAP net income for the quarter at $105 million and non-GAAP diluted earnings per share (EPS) at $0.54, both figures falling below the consensus of $122 million for net income and $0.60 for EPS.
For the full year 2024, UBS estimates BioMarin's total revenue to be $2.761 billion, aligning closely with the consensus estimate of $2.766 billion. This forecast is within the range of BioMarin's own guidance of $2.7 to $2.8 billion. While the company has provided a non-GAAP operating margin guidance of 23-24%, this does not account for potential savings from the strategic review.
UBS suggests that a 25-35% reduction in research and development (R&D) and selling, general, and administrative (SG&A) expenses could lead to a valuation between $140 and $149 per share.
BioMarin remains one of UBS's top picks for 2024, as the firm believes the opportunities for Voxzogo expansion are not fully appreciated by the market. Further data and regulatory clarity expected in 2024 could enhance the treatment's prospects.
UBS estimates the value of BioMarin's enzyme replacement therapy (ERT) base business to support the company's current valuation, estimating its worth at approximately $80 to $90 per share.
InvestingPro Insights
As BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) approaches its first quarter earnings release, data from InvestingPro provides a financial snapshot that could be of interest to investors. The company's market capitalization stands at $16.91 billion, indicating a significant presence in the biopharmaceutical sector.
With a high P/E ratio of 99.79, BioMarin is trading at a premium, reflecting expectations of future growth, which aligns with the InvestingPro Tip noting that net income is expected to grow this year. Moreover, the company's revenue has seen a healthy growth of 15.42% over the last twelve months as of Q4 2023, with a gross profit margin of 47.85%, showcasing the company's ability to maintain profitability.
InvestingPro Tips also highlight that BioMarin's stock generally trades with low price volatility, which could be appealing to investors looking for stability in the biotech space. Tthe company's cash flows can sufficiently cover interest payments, and its liquid assets exceed short-term obligations, providing a solid financial foundation for operations and potential expansion.
With analysts predicting profitability this year, these insights complement UBS's optimistic outlook for BioMarin's business and its treatments like Voxzogo.
For investors seeking further analysis and detailed insights, there are additional InvestingPro Tips available for BioMarin, which can be found at https://www.investing.com/pro/BMRN. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to a comprehensive suite of tools and data to inform your investment decisions.
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