Biogen today reported a huge earning beat, but disappointing guidance for the rest of the year. When you crunch the numbers, the midpoint of Biogen's guidance range for 2H 2020 came in slightly below Street consensus for both earnings and revenues.
Biogen has a reasonable, but not great valuation, with forward PEG of 3.78 and forward PSG of 1.27. It's currently in the lower half (26th percentile) of its three-year valuation range in terms of forward P/S and forward P/E. Biogen pays no dividend, and as a result the stock is more volatile than a dividend-paying stock would be.
Sentiment on Biogen improved quite a bit today. There have been no analyst upgrades yet, but options traders moved from net-bearish to net-bullish positioning for the short term, and from net-bearish to net-neutral positioning for the long term.
We're coming up on the strong season for pharmaceutical stocks in August. Biogen has only one phase 2 clinical trial result due in the second half of 2020 for its multiple sclerosis drug, but there are five results due in the first half of 2021, including a phase 3. These could prove to be major catalysts for the stock over the next year.
For the near term, watch for a possible trend line break as a sign that the stock will move higher.
Biogen has a reasonable, but not great valuation, with forward PEG of 3.78 and forward PSG of 1.27. It's currently in the lower half (26th percentile) of its three-year valuation range in terms of forward P/S and forward P/E. Biogen pays no dividend, and as a result the stock is more volatile than a dividend-paying stock would be.
Sentiment on Biogen improved quite a bit today. There have been no analyst upgrades yet, but options traders moved from net-bearish to net-bullish positioning for the short term, and from net-bearish to net-neutral positioning for the long term.
We're coming up on the strong season for pharmaceutical stocks in August. Biogen has only one phase 2 clinical trial result due in the second half of 2020 for its multiple sclerosis drug, but there are five results due in the first half of 2021, including a phase 3. These could prove to be major catalysts for the stock over the next year.
For the near term, watch for a possible trend line break as a sign that the stock will move higher.
Comment:
BIIB is testing the trend line after a big double upgrade from Goldman Sachs.
