On Monday, H.C. Wainwright maintained its Buy rating and $68.00 price target for Halozyme Therapeutics (NASDAQ:HALO). The firm's decision follows Halozyme's recent withdrawal of its proposal to acquire Evotec AG (ETR:EVTG) (EVO), a European drug discovery and development company. The takeover bid was intended to diversify and extend Halozyme's revenue and EBITDA growth. However, Evotec's Board of Directors opted to defend against the bid, appointing an investment bank to assist in this effort. Halozyme's multiple requests for meetings with Evotec's management were denied, leading to the withdrawal of their offer.
Halozyme had initiated a bid to take over Evotec with the goal of creating a combined U.S. and European innovative services company. This move was met with resistance from Evotec, which was not receptive to the proposal. Late last week, Halozyme announced the termination of its acquisition efforts after it became clear that Evotec's Supervisory and Management Boards were not willing to engage in discussions about a potential transaction.
Despite the failed acquisition attempt, H.C. Wainwright views the outcome as neutral for Halozyme. The firm believes Halozyme remains well-positioned for future growth, thanks to its royalty streams from the ENHANZE-coformulated products pipeline. The analyst emphasized that their positive stance on Halozyme was never contingent on the successful acquisition of Evotec.
In light of the recent events, H.C. Wainwright reaffirmed its confidence in Halozyme's standalone prospects. The firm's reiteration of the Buy rating and 12-month price target of $68 reflects their ongoing belief in the company's growth potential, independent of the proposed Evotec transaction. Halozyme's focus will continue on its existing business and product pipeline, as it moves forward without the Evotec acquisition.
In other recent news, Halozyme Therapeutics reported significant increases in third-quarter revenues and earnings, exceeding market expectations. The company's third-quarter revenues reached $290 million, primarily driven by royalty-based income from its ENHANZE technology. Net earnings were also robust at $137 million, equating to $1.05 per diluted share. Analysts from Piper Sandler and H.C. Wainwright responded to these developments by adjusting their stock price targets for Halozyme, while maintaining their respective Neutral and Buy ratings.
Halozyme's full-year 2024 revenue guidance was also revised upwards to between $970 million and $1.02 billion, due to an expected increase in royalty revenues. H.C. Wainwright also revised its full-year 2024 earnings estimate upward to $3.47 per diluted share, considering the positive earnings report and a $750 million share buyback program.
Despite projections of flat product sales in 2024, Halozyme anticipates maintaining strong momentum into 2025, supported by a robust pipeline and market expansion strategies. The company's management expressed confidence in securing new partnerships and leveraging its robust patent portfolio for future growth.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Halozyme Therapeutics' financial position and market performance. The company's market capitalization stands at $6.23 billion, with a P/E ratio of 16.3 based on the last twelve months as of Q3 2024. This relatively modest valuation is particularly interesting given Halozyme's strong revenue growth of 21.35% over the same period, reaching $947.36 million.
InvestingPro Tips highlight Halozyme's financial strength and growth potential. The company boasts a perfect Piotroski Score of 9, indicating robust financial health. Additionally, Halozyme is trading at a low P/E ratio relative to its near-term earnings growth, suggesting potential undervaluation. This aligns with H.C. Wainwright's positive outlook on the company's standalone prospects.
It's worth noting that Halozyme has demonstrated significant profitability, with an impressive operating income margin of 50.35% in the last twelve months. This strong performance supports the analyst's confidence in the company's future growth, even without the Evotec acquisition.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Halozyme Therapeutics, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.