Shares of Regeneron Pharmaceuticals Inc (NASDAQ: REGN) have already gained about 25% since early September but a JPMorgan analyst is convinced the stock will continue to move up in the coming months.
Chris Schott recommends that investors buy Regeneron shares as they have upside to $850. That price objective translates to another 20% gain from here.
The analyst expects Regeneron Pharmaceuticals’ Eylea drug for age-related macular degeneration to fuel the next leg up in its stock price.
While we expect Eylea trends to be in focus given this quarter’s volatility and Vabysmo launch in 2022, we see these concerns as short-term and expect the launch of high-dose Eylea to represent a far more important driver for REGN shares.
He’s bullish even though Eylea sales were down 3.0% year-on-year in the fourth quarter of 2022.
Schott agrees that Eczema is a crowded market but still expects Regeneron’s Dupixent to also help unlock more upside for its share price moving forward. His note reads:
We see Dupixent as well-positioned for further volume gains with a dominant share in one of the least penetrated major immunology categories.
That therapy, the analyst added, will help the company expand biologic penetration in atopic dermatitis by over 100% in the next five years.
Initial data for the company’s prostate cancer treatment looks promising as well, Schott concluded. At about 15 times, Regeneron shares are trading at a discount to their average price-to-earnings multiple over the past five years.
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