How Will Biogen Idec (BIIB) Stock React To This Analyst Upgrade?

NEW YORK (TheStreet) -- Shares of Biogen Idec Inc. (BIIB) are up 2.10% to $315.30 in pre-market trade after J.P. Morgan (JPM) upgraded the stock to "overwight" from "neutral" and raised its price target to $375 from $300, based on "multiple mid-stage pipeline opportunities and MS."

The firm said: "With respect to the MS franchise, we conducted a survey of 50 neurologists that points to upside for Tecfidera. Indeed, we have also fine tuned our MS estimates and are above consensus for Tecfidera, which is the key near-term commercial driver."

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Separately, TheStreet Ratings team rates BIOGEN IDEC INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BIOGEN IDEC INC (BIIB) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BIIB's very impressive revenue growth exceeded the industry average of 26.2%. Since the same quarter one year prior, revenues leaped by 50.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BIIB's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BIIB has a quick ratio of 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, BIOGEN IDEC INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.58% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • You can view the full analysis from the report here: BIIB Ratings Report

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