Genmab A/S, the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Justin Smith from Bernstein maintained a Sell rating on the stock and has a DKK1,015.00 price target.
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Justin Smith has given his Sell rating due to a combination of factors surrounding Genmab A/S’s strategic decisions and financial projections. The proposed $8 billion deal with Merus is seen as a strategic move to delay the patent cliff by five years, potentially benefiting the company’s top line. However, this comes with significant near-term value destruction, as the deal is expected to be dilutive to earnings per share until 2031 and may not meet the weighted average cost of capital until 2030.
Additionally, the share price already seems to account for the best-case scenario, and there are concerns about the company’s ability to manage M&A risks effectively. The steep projected revenue drop after 2034 suggests that without regular acquisitions, the company may face challenges. The price target set by Smith reflects a significant discount to US biotech peers, indicating less favorable growth prospects for Genmab compared to its competitors.
0MGB’s price has also changed dramatically for the past six months – from DKK1168.500 to DKK2058.875, which is a 76.20% increase.