On Monday, Bernstein initiated coverage on shares of Regeneron (NASDAQ:REGN) Pharmaceuticals (NASDAQ:REGN), assigning an Outperform rating and setting a share price target of $1,125. The new rating reflects the firm's positive outlook on the pharmaceutical company's growth prospects, particularly driven by its Dupixent and Oncology product lines.
The analyst from Bernstein highlighted the potential for significant upside in Regeneron's stock, despite adopting a cautious view on the company's Eylea product. The optimism is based on the strong performance and expected growth of Dupixent, a medication for several inflammatory diseases, and the company's oncology portfolio.
Regeneron's stock valuation, while not considered inexpensive at 21 times the consensus 2024 earnings per share (EPS), was described as a case of "you get what you pay for." The firm's analysis suggests that investors are likely to witness robust earnings growth, projecting an annual EPS increase of 13% from 2024 to 2027, which is lauded as one of the best growth rates in the pharmaceutical industry.
The Outperform rating indicates that Bernstein expects Regeneron's stock to perform better than the average total return of the stocks covered by the firm over the next 12 months. The $1,125 share price target suggests a level of confidence in the stock's potential to rise from its current market price.
In summary, the coverage initiation by Bernstein points to a strong conviction in Regeneron's business strategy and its ability to deliver above-average earnings growth, driven by key products in its portfolio. The firm's outlook provides a positive signal to the market about Regeneron's investment potential.
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