On Thursday, BMO Capital Markets maintained its Market Perform rating on Neurocrine (NASDAQ:NBIX) Biosciences (NASDAQ:NBIX) but increased the stock's price target to $138 from $129. The adjustment comes amid consistent revenue from Ingrezza, the company's leading product, and expectations of further market expansion.
Neurocrine's Ingrezza, a treatment for movement disorders such as tardive dyskinesia (TD) and chorea, has shown stable revenue performance. The analyst from BMO Capital Markets noted the potential for increased revenue as the drug continues to penetrate the TD and chorea markets. This anticipated growth is reflected in the revised price target.
The company is also focusing on its muscarinic platform, with critical data expected in the third quarter of 2024. The Phase 2 schizophrenia trial results for '568 are highly anticipated, as they could be pivotal for the company's stock performance. The trial's outcome could validate the recent investments in Neurocrine's muscarinic platform.
The BMO analyst highlighted that improvements greater than 10 points in the Positive and Negative Syndrome Scale (PANSS) compared to placebo at six weeks would likely be received well. However, with limited data currently available, the firm has decided to maintain a cautious stance on the stock for the time being.
Neurocrine Biosciences specializes in neurology and endocrinology treatments. Its lead asset, Ingrezza, has been a significant contributor to the company's financial performance and is central to its near-term growth strategy. The upcoming trial results could further influence the company's valuation and investor sentiment.
InvestingPro Insights
InvestingPro data highlights Neurocrine Biosciences' robust financial health and market performance. With a market capitalization of $14.39 billion and a strong revenue growth of nearly 24% over the last twelve months as of Q1 2024, Neurocrine is showing significant momentum. The company's gross profit margin stands impressively at 69.54%, indicating efficient operations and profitability.
InvestingPro Tips suggest that while analysts have revised their earnings expectations downwards, the company is trading at a high earnings multiple, with a P/E ratio adjusted for the last twelve months of 34.05. Despite this high valuation, Neurocrine's stock has experienced a considerable uptick, with a 26.14% total return over the past six months. This performance is underscored by the fact that the stock is trading near its 52-week high, at 96.4% of this peak.
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