Analysts have taken action on some health care stocks.
Among the health care companies that saw their stocks re-rated by investment banking and financial services companies are AbbVie (ABBV, Financial) and two mid-caps, bluebird bio (BLUE, Financial) and Alnylam Pharmaceuticals (ALNY, Financial).
The first stock of this short list of re-rated health care companies is AbbVie. According to thefly.com, LEERINK Partners LLC – the health care specialized investment bank – upgraded shares of AbbVie from Market Perform to Outperform.
The U.S. global health care company that was originated in 2013 as Abbott Laboratories’ (ABT, Financial) spinoff and headquartered in Lake Bluff, Illinois, is trading at $90.39 per share, a few below its 52-week high of $90.95 per share. The health care stock is uptrending and has gained a hefty 44.35% year to date.
Despite this solid accretion in the market value of AbbVie, Leerink analyst Geoffrey Porges, still sees in the long run more positive development in the share price of the health care stock “as the company's late-stage pipeline comes to fruition,” reports The Fly. Why? Because as the company will gradually complete the projects it is advancing, explained Porges, analysts will increase their estimates on AbbVie with positive impact on the market value.
Concerning expectations on AbbVie’s sales and revenue for the next two years, analysts foresee that the company will close the full fiscal 2017 with a 14.5% increase year over year in the EPS to $5.52 and a 18.5% increase year over year in the EPS for full fiscal 2018 to $6.54. Both estimates on the company’s earnings are backed on revenue that for the two fiscal years in question are projected to come in at $27.91 billion (up 9.20% year over year) and at $30.74 billion (up 10.20% year over year).
For the next five years, analysts see a 14.16% annual average increase in AbbVie’s sales.
Leerink also increased by 19.1% its target price on shares of AbbVie from $89 to $106 per share. This raise dragged the average target price up to $87.82 per share of AbbVie. This is a mean of a total of 17 estimates of analysts who were surveyed on AbbVie’s target price and range between a low of $60 per share and a high of $107 per share.
AbbVie has a recommendation rating of 2.4 out of 5.
AbbVie distributes an annual dividend of $2.56 – through quarterly payments of 64 cents – to its shareholders for a dividend yield of 2.88% versus a current Standard & Poor's 500 dividend yield of 1.90%.
GuruFocus gives AbbVie a financial strength rating of 5 out of 10 and a profitability and growth rating of 7 out of 10.
AbbVie currently has a market capitalization of $144.09 billion, a price-book (P/B) ratio of 23.94, a price-sales (P/S) ratio of 5.47 and a price-earnings (P/E) ratio of 22.21. The forward P/E ratio is 13.46.
The second health care stock of this list is bluebird bio, a clinical-stage biotechnology company that is engaged in transformative gene therapies’ development for serious genetic diseases such as hereditary neurological disorders, intermedia and major beta-thalassemia, severe anaemias and cancer types such as relapsed/refractory multiple myeloma and certain human papilloma virus related cancer.
Bluebird bio has been downgraded by Morgan Stanley to Underweight from Equal-Weight, reports StreetInsider.com.
The biotech stock has an average target price of $117.33 per share, which represents a 6.5% downside from the current share price of $125.45 that with a total volume of 45.59 million shares outstanding leads to a market capitalization of $5.72 billion.
The average target price is a mean of 15 estimates on bluebird bio’s target price. These estimates range between a low of $39 per share and a high of $158 per share.
Bluebird bio has a recommendation rating of 2.3 out of 5.
Bluebird is currently trading at $125.45 per share, with a market capitalization of $5.72 billion, a P/B ratio of 4.77 and a P/S ratio of 190.97.
GuruFocus gives bluebird a financial strength rating of 6 out of 10, and a profitability and growth rating of 1 out of a total of 10.
The last health care stock on this list is Alnylam Pharmaceuticals, a biopharmaceutical company that is engaged in the development and commercialization of RNA interference-based new therapeutics for the treatment of genetic disorders, cardio-metabolic diseases and infectious diseases of the liver.
The biopharmaceutical company has been upgraded by Goldman Sachs to a rating of Buy from the previous rating of Neutral.
As reported by StreetInsider.com, Goldman Sachs analyst Terrance Flynn “raises Patisiran peak sales from $1.8 billion to $2.9 billion and believes the stock is only pricing in about have [sic] of the total estimate revenues.”
Patisiran is a medication used as treatment for patients affected with familial amyloidotic polyneuropathy, a rare progressive sensual-motor and autonomous system neuropathy, which onset starts in the adult age. Common complications of this rare disease are weight loss and heart involvement. Ocular and renal problems can also occur.
Alnylam Pharmaceuticals is trading at $122.31 per share, with a market capitalization of $11.22 billion, a P/B ratio of 9.99 and a P/S ratio of 160.29.
For full fiscal years of 2017 and 2018, analysts forecast a 66.70% and 59% year-over-year increase to $78.6 million and to $124.97 million in the company’s revenue, but a worsening is expected in the bottom line of Alnylam Pharmaceuticals’ income statement for full fiscal years of 2017 and 2018 to a loss of $5.2 and $5.3 per share.
The average target price – after Goldman Sachs’ 162.9% raise from $62 to $163 per share – is $117.06 per share, and the recommendation rating is 2.2 out of 5.
GuruFocus gives Alnylam Pharmaceuticals a financial strength rating of 6 out of 10 and a profitability and growth rating of only 1 out of 10.
Disclosure: I have no positions in any stock mentioned in this article.
