Delphine Le Louet, an analyst from Bernstein, maintained the Hold rating on Galapagos. The associated price target is €27.90.
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Delphine Le Louet has given her Hold rating due to a combination of factors surrounding Galapagos NV’s current strategic position and future potential. The company has recently undergone a significant transformation, shifting from a biotech with a cell therapy pipeline to an investment entity focused on building biotech businesses in areas like oncology and immunology. This strategic pivot presents both opportunities and challenges, particularly in terms of maximizing shareholder returns from its substantial cash reserves.
Despite the promising new direction and the experienced management team in place, there are inherent risks associated with this transition. The company’s valuation is now heavily reliant on its cash reserves and the potential returns from future investments. Delphine Le Louet’s analysis suggests that while there is potential for significant returns, the ambitious valuation targets and the inherent risks in biotech investments justify a cautious approach, leading to the Hold rating.