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Deutsche Bank's Take On Big Pharma: 3 Buys And A Hold

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Deutsche Bank's Take On Big Pharma: 3 Buys And A Hold
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Biotech stocks have been on a tear in the past week, with the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: IBB) up 8.8 percent. However, despite the run-up, Deutsche Bank sees more upside ahead for three of the biggest biotech names in the market.

Analyst Andrew Peters initiated coverage on a handful of top biotech stocks on Thursday, and he sees more positives than negatives at the moment. Here’s a rundown of what he had to say (check out Peters' track record here).

Biogen

Peters initiated Biogen Inc (NASDAQ: BIIB) at Buy with a $315 price target. Spinraza and other new drugs will likely not offset Biogen’s declining multiple sclerosis business, but Peters says investors should consider Biogen’s impressive earnings power.

“Going forward, we believe meaningful top-line growth will be driven by the pipeline and recently approved growth products (ie Spinraza), while earnings growth will further be aided by potential margin expansion,” Peters wrote.

Related Link: The Near-Term Setup For Biogen Has Positive Risk/Reward Written All Over It

Gilead

Peters initiated coverage of Gilead Sciences, Inc. (NASDAQ: GILD) at Buy with a $79 price target. At its current valuation, Gilead shares are pricing in the worst-case scenario, Peters wrote. Sentiment can only get better from here, and Peters expects the valuation disconnect will be short-lived. “With virtually any strategic deal making it likely to signal a positive step in the right direction, we expect the disconnect to normalize over the next 12mos, and hence see the current value as an opportunity for investors,” he wrote.

Esperion

Peters initiated coverage of Esperion Therapeutics Inc (NASDAQ: ESPR) at Buy with a $48 price target. Esperion currently has a highly favorable risk-reward balance, and Peters sees “the totality of the data to-date as highly supportive.” The next positive catalyst for the stock will likely be preliminary ph2 triplet study data in the second half of 2017 followed by pivotal data coming in the first half of 2018.

Amgen

Peters initiated coverage of Amgen, Inc. (NASDAQ: AMGN) at Hold with a $172 price target. While Peters praised Amgen’s track record of innovation, he doesn’t see any evidence suggesting near-term earnings or multiple growth. Instead, Peters wrote that “meaningful inflection may take 12+ months to fully play out based on current dynamics and modest signs of uptick post-FOURIER.”

Latest Ratings for AMGN

DateFirmActionFromTo
Jul 2017ArgusMaintainsBuy
Jul 2017UBSMaintainsNeutral
Jul 2017BMO CapitalDowngradesOutperformMarket Perform

View More Analyst Ratings for AMGN
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