Biogen Inc’s BIIB base business seems to be worth more than what the Street estimates, and it is possible that investors are not properly valuing royalty streams coming to the company, which contributes 15% of current revenues and 40% of the valuation, according to Wells Fargo.
The Biogen Analyst: Mohit Bansal upgraded the rating for Biogen from Equal Weight to Overweight, while keeping the price target unchanged at $265.
The Biogen Thesis: The current valuation of the stock has a “very compelling risk/reward into BAN-2401 data,” which is scheduled for the second half of 2022, Bansal said in the upgrade note.
“Our call assumes that investors would assign at least 50% probability to BAN-2401 into the data event,” he added.
“While Alzheimer’s is hard to handicap, we note that it is one of the biggest catalysts of the year, and we see investors taking an equal weight position in Biogen at minimum post 1Q EPS. Given the attractive risk/reward, we think this trade is too good to ignore at this point,” the analyst wrote.
BIIB Price Action: Shares of Biogen had risen by 1.32% to $215.36 at the time of publication Monday, according to Benzinga Pro.
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