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Valued at a market cap of $14.8 billion, Incyte Corporation (INCY) is a biopharmaceutical company that engages in the discovery, development, and commercialization of therapeutics for oncology, inflammation, and autoimmunity areas. The Wilmington, Delaware-based company focuses on finding solutions for serious unmet medical needs.
Shares of this biotech company have slightly underperformed the broader market over the past 52 weeks. INCY has gained 30% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31.1%. Moreover, shares of INCY are up 12.4%, compared to SPX’s nearly 24.1% return on a YTD basis.
Nevertheless, zooming in further, INCY has outperformed the Health Care Select Sector SPDR Fund’s (XLV) 10.1% gain over the past 52 weeks and 3.5% return on a YTD basis.
On Nov. 19, shares of INCY crashed 8.3% after the company announced setbacks with two drugs acquired in its $750 million buyout of Escient Pharmaceuticals earlier this year.
Nonetheless, on Oct. 29, despite its adjusted EPS of $1.07, missing the Wall Street estimates of $1.12, the stock soared 12% after its Q3 earnings release. The rise in share price can be primarily attributed to strong revenue growth in its Jakafi brand and Opzelura cream, which led to a 24% yearly growth in the company’s revenue to $1.14 billion. The reported revenue surpassed the consensus estimates of $1.09 billion. Moreover, INCY raised the full-year 2024 Jakafi revenue guidance to $2.74 billion - $2.77 billion, which might have further bolstered investor confidence.
However, for the current fiscal year, ending in December, analysts expect INCY’s EPS to decline 85.1% year over year to $0.40. The company’s earnings surprise history is quite disappointing. It missed the consensus estimates in each of the last four quarters.
Among the 23 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on 11 “Strong Buy,” 11 “Hold,” and one "Strong Sell” rating.
The above configuration is more bullish than three months ago, with ten analysts suggesting a “Strong Buy.”
However, on Nov. 14, RBC Capital analyst Brian Abrahams maintained a “Sector Perform” rating on INCY and raised the price target to $80, which indicates a 13.4% upside from the current levels.
The mean price target of $78.20 represents a 10.8% upside from INCY’s current price levels. The Street-high price target of $97 suggests an upside potential of 37.5%.
