The firm lowered the price target to $10 from $11 for the entrepreneurial pharmaceutical company.
Cantor Fitzgerald said it lowered the company's ratings because of a valuation call, as the company will likely spend more on research and development in the new year.
"We believe that sentiment may turn even more negative if risky clinical programs fail and there is heightened anticipation of additional financing needs," said Cantor Fitzgerald specialty pharmaceutical analyst Irina Rivkind Koffler.
Shares of Ironwood Pharmaceuticals are up 3.97% to $13.09 in mid-day trading on Thursday.
Separately, TheStreet Ratings team rates IRONWOOD PHARMACEUTICALS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate IRONWOOD PHARMACEUTICALS INC (IRWD) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Currently the debt-to-equity ratio of 1.65 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 5.17, which shows the ability to cover short-term cash needs.
- 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, IRONWOOD PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 32.0% when compared to the same quarter one year prior, rising from -$61.78 million to -$41.99 million.
- IRONWOOD PHARMACEUTICALS INC has improved earnings per share by 41.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, IRONWOOD PHARMACEUTICALS INC reported poor results of -$2.38 versus -$0.71 in the prior year. This year, the market expects an improvement in earnings (-$1.37 versus -$2.38).
- This stock has increased by 39.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in IRWD 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: IRWD Ratings Report