On a day when biotech stocks like Gilead Sciences (GILD), Regeneron Pharmaceuticals (REGN) and Celgene (CELG) are flying, few are flying higher than Alexion Pharmaceuticals (ALXN).
Alexion has gained 7.1% after the biotech company reported a profit of $1.27 a share, topping analyst forecasts for $1.15. Alexion also raised its full-year guidance to between $5.15 and $5.20 a share, up from a range of $4.95 to $5.05.
So what’s not to like? Citigroup’s Yaron Werber and Kumaraguru Raja worry about Alexion’s valuation–it trades at 36.9 times forward earnings–and state their preference for Celgene, Gilead Sciences and Regeneron Pharmaceuticals. They explain why:
Overall, a good quarter as Soliris is growing nicely driven by global expansion. The updated guidance for 2014 looks good boosted by incrementally higher revenues and lower tax rate. Soliris is posting good growth and is once again showing an ability to beat and raise which bodes well for the stock. We are encouraged that the guidance raise was more than the revs beat which bodes well for Q4. Given the high P/E, we prefer Celgene, Gilead and Regeneron as we consider Regeneron to be a better value for a high growth/high multiple stock.
Shares of Gilead Sciences have gained 1.4% to $107.61 at 2:51 p.m. today, while Regeneron Pharmaceuticals has risen 3.2% to $396.63 and Celgene has advanced 6.1% to $100.55 after reporting top-notch earnings of its own.
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