NEW YORK (TheStreet) -- Shares of InterMune Inc. (ITMN) are down -3.28% to $50.35 in pre-market trade after the biotech was downgraded to "neutral" on valuation at Goldman Sachs Group (GS - Get Report).
"We continue to believe Esbriet for IPF will be approved by the FDA on or before the November 23 PDUFA date, and should emerge as the frontline drug of choice. But with ITMN trading +6% our 12-month price target of $49, we now see valuation as fair," the firm said in a note today.
Yesterday, the company's shares closed up 14.44% to $52.06 after it was reported that drugmakers, including Sanofi (SNY - Get Report) and Roche Holding (RHHBY), are among bidders for the company, Bloomberg reported.
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- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 13.2% when compared to the same quarter one year ago, dropping from -$62.87 million to -$71.19 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, INTERMUNE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for INTERMUNE INC is currently very high, coming in at 83.86%. Regardless of ITMN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ITMN's net profit margin of -199.20% significantly underperformed when compared to the industry average.
- ITMN's debt-to-equity ratio of 0.64 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- Investors have driven up the company's shares by 193.44% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in ITMN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: ITMN Ratings Report