JP Morgan Upgrades Celgene, Says 'Too Cheap To Ignore'

• Shares of Celgene Corporation CELG have declined 8.35 percent over the past month, touching a low of $104.52 on September 28.
• JP Morgan’s Cory Kasimov has upgraded Celgene from Neutral to Overweight, with a price target of $152.
• Kasimov believes that the stock’s valuation is becoming “increasingly attractive,” while the company’s overall fundamentals remain strong and its BD strategy is “impressive.”

Analyst Cory Kasimov stated that with the recent pullback in the shares, the current valuation of Celgene’s stock is “simply too compelling to remain on the sidelines,” while also mentioning that Celgene was “one of the most fundamentally sound biotechs that has done a nice job of addressing next decade revenue gaps through BD.”

Despite the lack of catalysts for the stock before 2H16, Kasimov believes that the growth expected of the company also makes the stock attractive. In the longer term, the company is expected to grow at a five-year CAGR of 24 percent, as compared to 13 percent expected for its pharma peers and 11 percent for its large cap biotech peers.

Kasimov also expressed confidence regarding the company’s evolving BD strategy, saying, “CELG not only has an impressive proprietary pipeline, but it is also focused on partnering/acquiring assets with cutting-edge innovation. We are confident in the company’s ability to parse out potentially first-in-class/best-in-class products to support long-term growth.”

In addition, the various BD deals that were completed by the company over the past year increases Kasimov’s confidence in the management’s “execution and vision beyond 2020.”