Investing.com -- Bernstein initiated coverage of Biogen Inc (NASDAQ:BIIB) with a “Market-Perform” rating and a price target of $160 as it noted uncertainty around the company’s near-term growth prospects despite long-term value potential.
Biogen has traded between $200 and $350 over the past decade, offering volatility for hedge funds but limited sustained value for long-term investors, Bernstein said in a note. The company’s fortunes have largely been tied to Alzheimer’s treatments, but the launch of Leqembi has underwhelmed expectations, with peak sales estimates cut by 40% in 2024.
Bernstein believes Biogen is undervalued at less than 10 times price-to-earnings but sees no urgency to buy, noting that an inflection in the stock’s narrative is unlikely before 2026. The firm also flagged potential risks, including competition from semaglutide in Alzheimer’s and possible delays in Leqembi’s subcutaneous induction approval.
Despite its cautious stance, Bernstein credited CEO Chris Viehbacher for implementing a $1 billion cost-cutting plan and making strategic acquisitions, including Reata Pharmaceuticals (NASDAQ:RETA) for $7 billion. It sees Skyclaris reaching $1.6 billion in peak sales, while Biogen’s early pipeline remains underappreciated.
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