Regeneron Upgraded as BMO Sees Potential for Eye, Skin Drugs

Regeneron 'is well positioned heading into 2021 and see current levels as an attractive entry point,' BMO wrote, upgrading the stock.
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Regeneron  (REGN) - Get Report shares rose Monday after BMO Capital Markets analyst Matthew Luchini raised his rating on the biotech company to outperform from market perform and affirmed his price target at $630.

Regeneron "is well positioned heading into 2021," Luchini wrote in a commentary cited by Barron’s.

Regeneron shares recently traded at $547.06, up 1.7%. They surged 11% in 2021 through Friday's trading, and they leaped 59% over the past year amid optimism over its coronavirus antibody treatment.

While the company’s Eylea eye drug faces some headwinds, it still has room to grow, as does its Dupixent skin drug, he said. Luchini also is impressed with Regeneron’s cancer-drug pipeline.

“Given our positive view on Regeneron’s fundamentals and optionality provided by the pipeline, ... current levels provide an attractive entry point,” he said.

As for the covid treatment, “monoclonal antibody usage has been slow, even during the continuing surge,” Luchini said. 

“Given our expectation that the broader focus remains on expanding vaccine distribution, we expect demand to meaningfully decline as we move through the second half of 2021.”

Earlier this month, Citi analyst Mohit Bansal upgraded Regeneron to buy from neutral on optimism about Dupixent. 

Bansal says investors are focusing too much on weakness in Eylea and not enough on Dupixent.

The “recent weakness in the name is overlooking the pace of Dupixent’s growth and expansion potential,” he said, according to Seeking Alpha. 

Dupixent has plenty of potential for growth beyond its current label, Bansal said, according to Dow Jones.

His price target is $575.