Horizon Pharma in 2016: Can It Weather the Biotech Storm?
Share price estimates for Horizon
Based in Dublin, Horizon Pharma (HZNP) is a biopharmaceuticals company that operates in the following three business segments:
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Primary Care
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Orphan Drugs
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Rheumatology
Between 2013 and 2015, Horizon’s net sales grew at a CAGR (compounded annual growth rate) of ~220%.
The table above demonstrates ten brokerage firms and their estimated target price for Horizon. The consensus 12-month target price for Horizon is $34.90, which translates to a ~103.9% return compared to Horizon’s closing price of $16.32 on March 23, 2016.
According to a Bloomberg consensus of 11 brokerage firms recorded on March 23, 2016, 81.8% of analysts have rated Horizon as a “buy,” while 9.1% of them have rated the company as “hold.” Around 9.1% issued “sell” ratings.
Analyst recommendations for peers
By comparison, a Bloomberg survey of 22 analysts as of March 24, 2016, showed that 31.8% of analysts issued a “buy” rating for Valeant Pharmaceuticals (VRX), whereas 45.5% suggested that the stock should be a “hold,” and 22.7% analysts recommended a “sell” rating. These ratings came in the wake of Valeant’s revised lowered outlook and the news of a possible debt default.
According to ratings from 24 analysts taken by Bloomberg on March 24, 2016, 87.5% believed Mallinckrodt (MNK) should be a “buy,” whereas 12.5% recommended a “hold” rating for the company. None of the analysts suggested that the stock should be sold.
A Bloomberg consensus of 22 analysts, indicated 59.1% analysts issued “buy” rating for Endo International (ENDP), whereas 40.9% recommended the stock should be a “hold.” None of the analysts issued a “sell” rating on the stock.
As the share prices of pharma and biotechnology companies can be volatile, it’s often safer to avoid direct exposure and choose ETFs like the Guru Index ETF (GURU), which has more than 1.6% of its total holdings in Horizon.
In the next part, we’ll analyze Horizon’s performance by segment.
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