In a report released today, Allen Lutz from Bank of America Securities maintained a Buy rating on Doximity, with a price target of $82.00.
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Allen Lutz has given his Buy rating due to a combination of factors including the potential shift in pharmaceutical advertising from direct-to-consumer (DTC) channels to healthcare provider (HCP) channels. Recent data indicates a decline in TV drug advertising spend, which aligns with the possibility of increased regulatory pressure and a shift in marketing strategies. This trend could benefit companies like Doximity, which are well-positioned to capture advertising dollars redirected towards HCP channels.
Furthermore, historical data suggests that the return on investment for DTC TV ads has been declining over the past decade, primarily due to market saturation and access challenges. Despite this, pharmaceutical companies have been slow to reallocate their budgets. However, recent FDA reforms may prompt a reevaluation of advertising strategies, potentially leading to increased investment in HCP channels. This scenario presents an opportunity for Doximity to capitalize on the shifting landscape, justifying the Buy rating.
In another report released yesterday, Evercore ISI also maintained a Buy rating on the stock with a $70.00 price target.