A Tale of 3 Healthcare Stocks – 2 to Buy, and 1 to Sell


When the Oppenheimer investment bank speaks, investors listen – or they should.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "One of the 10 top performing research firms followed by TipRanks, 61% of Oppenheimer's stock picks have "worked" historically, producing positive returns for investors. In fact, on average, these choices generated positive returns approaching 12%, and well ahead of the long-term average returns of 10% on the stock market. "Data-reactid =" 12 "> One of the 10 best performing research companies followed by TipRanks, 61% of Oppenheimer's stock choices have" worked "historically, producing positive returns For investors, in fact, these choices generated positive returns approaching 12%, and well before long-term average returns of 10% on the stock market.

And spread across a field of almost 11,000 stock selections over more than a decade, this is no coincidence.

So when Oppenheimer announced on Wednesday that he had carefully looked into the healthcare sector and found two actions, he is confident that he can recommend the purchase – and the one he is almost sure it should be sold – these are tips that investors should carefully consider. .

Let's see what Oppenheimer has to say, starting with:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Regeneron Pharmaceuticals (REGN)"data-reactid =" 16 ">Regeneron Pharmaceuticals (REGN)

Regeneron is part of a strange breed in biotechnology – a company that makes money. Regeneron, based in Tarrytown, New York for 32 years, has been developing drugs to treat a wide range of diseases, ranging from age-related macular degeneration and diabetic retinopathy (Eylea) to atopic dermatitis (Dupixent) with atherosclerotic cardiovascular diseases (Praluent) and locally advanced cutaneous squamous cell carcinoma (Libtayo).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Oppenheimer analyst Hartaj Singh argues that Regeneron – which already makes $ 7.6 billion in annual sales and earns more than $ 2.1 billion a year – is preparing to move to the "next level of business growth and R & D" as the competition at Eylea is decreasing and the company is stepping up its focus on growing Dupixent sales – a potential market of $ 10 billion. "data-reactid =" 18 "> Oppenheimer analyst Hartaj Singh argues that Regeneron – already $ 7.6 billion in annual sales and earning more than $ 2.1 billion annually – – is preparing to move to the “next level of business growth and R&D” as competition at Eylea wanes and the company steps up efforts to increase sales of Dupixent – a potential market of $ 10 billion.

At the same time, Singh is impressed with the “ emerging pipeline generated internally ''. of Regeneron in 2020, which the analyst calls “ the best in its class '', as well as by “ refocusing management on cost control '' & # 39; & # 39 ; and the planned share repurchase of $ 1 billion. Combined, these two measures promise to increase profits – and then distribute them among fewer shares in circulation, accelerating growth in earnings per share.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Consequently, Singh evaluates the Regeneron stock" outperformed "with a price target of $ 450, promising an improvement of more than 25% over current prices. (To follow Singh's background, click here) "data-reactid =" 20 "> Consequently, Singh estimates that the Regeneron share" outperforms "with a price target of $ 450, promising an improvement of 25% compared to current prices. (To consult the Singh's background, click here)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "However, Wall Street is not completely sold on Regeneron. TipRanks' analysis of 11 analysts shows a consensus rating of moderate buying, with 4 analysts recommending to buy, while 7 recommending to maintain. The average price target on 12 months on the stock is $ 396.33, which is an increase of about 10%. (See the analysis of Regeneron's actions on TipRanks) "data-reactid =" 21 "> However, Wall Street is not completely sold on Regeneron. TipRanks' analysis of 11 analysts shows a moderate buy consensus rating, with 4 analysts recommending Buy, while 7 recommends Hold. The 12-month average stock price target is $ 396.33, which represents an increase of about 10% (see the ; analysis of Regeneron's actions on TipRanks).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Novavax (NVAX)"data-reactid =" 30 ">Novavax (NVAX)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Oppenheimer's second choice of stock brings us back to more familiar territory: biotechnological actions that do not earn money (at least not yet). Kevin DeGeeterThe choice of vaccine specialist Novavax is clearly focused on the headlines, and more specifically, it is scheduled to align with recent news that the coronavirus epidemic that started in the provincial capital Wuhan , has now arrived in America, with the first American infection reported in Seattle on Wednesday. . "data-reactid =" 31 "> Oppenheimer's second choice of titles brings us back to more familiar territory: biotechnology titles that do not earn money (at least not yet). The choice of specialist Novavax vaccine analyst Kevin DeGeeter is clearly focused on headlines, and more specifically, scheduled to align with recent news that the coronavirus epidemic that started in the provincial capital Chinese Wuhan has now arrived in America, the first reported American infection having been reported Wednesday in Seattle.

As DeGeeter explains, "the epidemic of a powerful new strain of coronavirus infections" will remind investors of "the power of NVAX's flexible vaccine development infrastructure" . And yet, that is not the main reason why DeGeeter likes Novavax in 2020. It is because DeGeeter expects Novavax to take six to nine months to develop an effective vaccine against new Chinese disease – by then 2020 will be practically over.

On the contrary, this analyst considers the "upcoming reading of phase III in March from nanoparticles of recombinant hemagglutinin protein (HA) for protection against seasonal flu as the main value driver" for the stock of Novavax. DeGeeter believes phase II results will also be positive, and may be enough to convince the US Food and Drug Administration to approve the sale of NanoFlu as early as 2021. Once this happens, DeGeeter sees a high chance that Novavax will sell to a higher bidder.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For this reason, DeGeeter proposes an increase in the price of the share of $ 7.20 currently at $ 13 per share in early 2021. While an 80% return in 12 months may sound optimistic, it could actually be conservative. (To look at DeGeeter's track record , click here) "data-reactid =" 38 "> For this reason, DeGeeter proposes an increase in the share price from $ 7.20 currently to $ 13 per share at the beginning of 2021. Admittedly, an 80% return in 12 months may sound optimistic, but it could actually be conservative. (To look at DeGeeter’s track record, click here)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "On Wall Street, the average target price among analysts Novavax stock tracking is $ 17.38 per share, up 34% from what Oppenheimer promises.See Novavax stock analysis on TipRanks) "data-reactid =" 39 "> On Wall Street, the average target price among analysts who follow the Novavax share is $ 17.38 per share, or 34% more than Oppenheimer's promises (see Novavax stock analysis on TipRanks).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amarin Corp (AMRN)"data-reactid =" 48 ">Amarin Corp (AMRN)

As much as Oppenheimer analysts like Regeneron and Novavax, they are quite bearish towards Amarin, a seller of prescription omega-3 fatty acid capsules only for treating high triglyceride levels in patients. Oppenheimer arrives at his "underperform" recommendation on Amarin in an interesting way.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To start, analyst Leland Gershell notes that AstroZeneca's discontinuation of a clinical trial for a product (Epanova) that competes with the anti-triglyceride drug of Amarin (Vascepa) is positive for the stock of Amarin . Although there are other competing treatments (CaPre from Acasti Pharma for example and MAT9001 from Matinas BioPharma), the removal of Epanova from the mixture implies a larger market share for Vascepa – and an increased price target of $ 13 for the stock of Amarin. "Data-reactid =" 50 "> To begin with, analyst Leland Gershell notes that AstroZeneca's discontinuation of a clinical trial for a product (Epanova) that would compete with the anti-drug Amarin triglycerides (Vascepa) is positive for the Amarin stock. Although there are other competing treatments (CaPre from Acasti Pharma) for example, and MAT9001 from Matinas BioPharma), the withdrawal of Epanova from the mixture implies a larger market share for Vascepa – and an increased price target of $ 13 for the Amarin stock.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "That said, Gershell warns that" l & # 39; opportunity for AMRN to exit by acquisition (is decreasing) ", that is to say that the chances for the company to find a buyer willing to acquire Amarin at a premium valuation does not look not as good as they used to be. For this reason, despite breeding his share price target, Oppenheimer always ends up thinking that Amarin, at a share price of almost $ 21 (i.e. still 60% at above what he thinks the action is worth), remains too expensive and unlikely to outperform the market from now on. "data-reactid =" 51 "> That said, Gershell warns that" the possibility for AMRN to exit by acquisition (decreases) ", that is to say that the chances of the company of finding a willing buyer to acquire Amarin at a higher price not as good as it used to be. For this reason, despite breeding his share price target, Oppenheimer always ends up thinking that Amarin, at a share price of nearly $ 21 (i.e. still 60% at above what he thinks the action is worth), remains too expensive and should not outperform the market from now on.

In short, despite the improved outlook for its brand-name drug, the fact that the outlook for the company to obtain premium buyout prices is worse means that Amarin deserves a sales rating.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Overall, Wall Street is almost spread out also between bulls and those who choose to play it safe. Based on 10 analysts tracked in the past 3 months, 5 assess the stock of Amarin at a purchase, 4 say the holding, while 1 Issuing a sale, including the 12-month average price target of $ 29.88, which represents a return potential of nearly 44% for the stock.See Novavax stock analysis on TipRanks) "data-reactid =" 53 "> Overall, Wall Street is almost evenly split between bulls and those who choose to play cautiously. Based on 10 analysts monitored in the past 3 months, 5 rate Amarin's stock to Buy, 4 say Hold, while 1 issues a sale. In particular, the 12 month average price target is $ 29.88 which represents a yield potential of almost 44% for the stock (see Novavax stock analysis on TipRanks).

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