Analysts Very Positive on 3 Top Stocks Following Jefferies Healthcare Conference

June 13, 2016 by 247lee

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If it’s summertime then it is Wall Street conference time, because when the weather heats up so does the conference schedule. With the Jefferies Healthcare Conference wrapping up in New York City last week, the mood was reported as generally positive, with investors feeling much better than a few months ago. That despite the fact that some conference participants remain skeptical about the recent market rally.

A recent Jefferies research piece that highlighted some of the conference tidbits also pointed out that investors are concerned with the potential for headline events this summer, a theme we have circled around as well. Despite the potential for volatility, some stocks look intriguing. Here we focus on three of the five mentioned.

AbbVie

This stock is the top global pharmaceutical stocks at Jefferies and is also on the Franchise Stock Picks list. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries.

One of the biggest concerns with AbbVie is what eventually might happen with anti-inflammatory therapy Humira, which generated $14 billion in sales in fiscal 2015. That was the most any drug has recorded during a single year and represents a gigantic part of the company’s overall earnings. The problem is that biosimilars and generics are itching to enter the market with Amgen leading the charge, and some Wall Street analysts project that AbbVie may have a difficult time stopping that trend.

The patent board recently instituted Coherus BioSciences’ Inter Partes Review against the Humira ‘135 patent. The outcome of the review is expected in 12 months. While most analysts remain positive on Humira duration, the expected litigation uncertainty could continue to create an overhang on the stock.

Back in January, senior management at the company gave sales guidance that calls for Humira sales to climb, rather than shrink, to $18 billion by 2020. If the top management is right, then AbbVie still has time to build momentum for other drugs that can offset any future impact from biosimilars.

AbbVie investors are paid an outstanding 3.74% dividend. The Thomson/First Call consensus price target is $70. The stock closed Friday at $61 per share.

Hologic

This top medical devices and equipment stock has a fair amount of momentum lately but still sits way below highs printed last summer. Hologic Inc. (NASDAQ: HOLX) develops, manufactures and supplies diagnostics products, medical imaging systems and surgical products for women in the United States, Europe, the Asia-Pacific and elsewhere. The company operates through four segments: Diagnostics, Breast Health, GYN Surgical and Skeletal Health.

The company posted solid second-quarter results. In addition, Hologic continues to make outstanding progress in its largest segment, which is Diagnostics. Within this segment’s molecular diagnostics business, the company witnessed enhanced growth for the domestic franchise as its fully automated Panther system continued to gain new placements and competitive wins.

The consensus price target for the stock is posted at $42.19. The shares closed most recently at $34.14.

Incyte

This company often is rumored to be in the sights of a larger biotech company. Incyte Corp. (NASDAQ: INCY) has a current validated approach in hematology-oncology, and there’s reason to believe the three wholly owned clinical-stage assets the company has could drive several billion in revenue, something important for an acquiring company looking to acquire assets. Many on Wall Street are bullish on the company’s rich pipeline of small molecule therapies in all stages of development, and they see the company as a key player in the cancer space.

Incyte focuses on the discovery, development and commercialization of proprietary therapeutics in oncology. It offers Jakafi for the treatment of myelofibrosis and polycythemia vera cancers. Its clinical stage products include ruxolitinib cream, which is in Phase 2 clinical trial for the treatment of alopecia areata; and INCB52793, which is in Phase 1/2 for the treatment of advanced malignancies. The company’s clinical stage products also comprise baricitinib, which is in Phase 3 trial for rheumatoid arthritis, as well as a completed Phase 2 trial for psoriasis and diabetic nephropathy.

The company last week announced new 28-week data from a Phase 3 study (RESPONSE-2) on Jakafi for the treatment polycythemia vera (PV). The multi-center, open-label, randomized study evaluated the safety and efficacy of Jakafi, in comparison to the best available therapy, in patients with PV who are resistant to or intolerant of hydroxyurea, dependent on phlebotomy for hematocrit control and do not have an enlarged spleen.

The consensus price target is posted at $90, and the stock closed most recently at $80.41 a share.

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These three very different stocks all could make sense for aggressive growth portfolios. The issues in the market will remain, so investors may want to nibble now and see if there isn’t a better opportunity going forward.