Incyte: Disappointing 2017 expected to see big recovery in 2018.
Incyte Corp. (NASDAQ: INCY) has been a disappointment in 2017, with a 6% drop, but its shares were down over 30% in the past quarter. That sell-off may have left some analyst targets seemingly high, but all in all the pool of analysts have an average upside projection of about 57% for the coming 12 months. 2018 is expected to be a marginal return to profitability, but the estimates range from a loss of more than $1 per share to a gain of more than $1 per share. Either way, it is valued at about 12 times next year’s expected sales.
Incyte closed at $93.71, versus a consensus target price of $148.63. Its 52-week range is $93.49 to $153.15, and its market cap is $19.8 billion.
Biotech as a sector was recently featured by State Street Global Advisors as a sector of secular growth at a reasonable price. The firm’s 2018 outlook noted that biotech valuations are below their long-term average and may offer strong secular growth prospects as the aging population continues to need more medical treatment and innovation.
And Big Pharma
In addition, 24/7 Wall St. wanted to see how the pool of big cap biotechs compares to some of the top Big Pharma stocks that have been around for many years and that have relatively stable drug sales.
Pfizer Inc. (NYSE: PFE) is valued at less than 14 times expected earnings and its dividend yield is about 3.6%. Its shares were up 11% so far in 2017, but analysts are calling for a total return of about 10.5% in the next 12 months. Pfizer closed at $35.61, with a consensus target price of $38.14. Its 52-week range is $30.51 to $36.78 and its market cap is $212.3 billion.
Merck & Co. (NYSE: MRK) shares were down 4.5% so far in 2017, partly offset by its 3.4% dividend yield. Its forward P/E ratio is 14, and if analysts are correct there is more than 17% upside and more than 20% in expected total return with the dividend. Merck closed at $55.74. The consensus target price is $65.36, and the 52-week range is $53.63 to $66.80. The market cap is $151.9 billion.
AbbVie Inc. (NYSE: ABBV) shares were up about 52% so far in 2017, and its forward P/E ratio is over 17. It also has a 3% dividend yield. Because AbbVie has performed so well in 2017, the pool of analysts currently has just an 8% implied total return for the coming 12 months. The shares closed at $95.34, with a consensus target price of $99.85. The 52-week range is $58.80 to $98.52. The market cap is $152.2 billion.
Bristol-Myers Squibb Co. (NYSE: BMY) was last seen up about 7% so far in 2017, and it is valued at just over 20 times expected earnings. With a yield of 2.5%, analysts see a total return ahead of only about 5.5%. Shares of Bristol-Myers closed at $61.97, in a 52-week range of $46.01 to $66.10 and with a consensus target price of $63.82. The market cap is $101.4 billion.