David Bailey, an analyst from Morgan Stanley, has initiated a new Buy rating on Telix Pharmaceuticals (TLPPF).
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David Bailey’s rating is based on several promising factors for Telix Pharmaceuticals. Firstly, there is potential for improved reimbursement for prostate cancer imaging, particularly with the anticipated CMS transitional pass-through pricing for Gozellix starting in October 2025. This is expected to boost revenue significantly, with forecasts of Illuccix/Gozellix revenue reaching US$598 million in 2025 and increasing to US$690 million in 2026. Additionally, the introduction of new formulations and expanded indications could broaden the market over the medium to longer term.
Furthermore, Telix is focusing on commercial growth and pipeline investment, with expectations for improved margins and free cash flow generation by FY29/30. The valuation of A$26.30 per share incorporates revenue from approved products and contributions from later-stage candidates. Key catalysts include potential approval of Zircaix in the US, confirmation of CMS pricing status, and interim data from ongoing trials. The primary risk involves the non-approval of pipeline candidates, but the overall outlook remains positive, justifying the Buy rating.
In another report released today, Bell Potter also maintained a Buy rating on the stock with a A$30.00 price target.