Alexion Pharmaceuticals is outrageously undervalued
After noticing some call buying activity in Alexion Pharmaceuticals today, I gave the stock a look.
Analysts like Alexion. It has an 8.8/10 analyst summary score and an average price target of about $146.50 (versus the current price of about $113). S&P Global Intelligence rates it 85/100 for quality and 87/100 for financial health. Its growth stability earns a score of 62/100, which is great for a pharmaceutical company. Alexion has a nice, diverse portfolio of products that gives it some resiliency against changes in the demand for any one particular drug.
But the most attractive thing about Alexion stock is its valuation. The forward P/E of about 10 is very low for a stock with such extraordinary earnings growth. Analyst forecasts for Alexion's earnings have risen something like 25% over the last two years, but the share price has fallen over the same period. Moreover, Alexion has beaten estimates for every single one of the last 8 quarters. S&P Global Intelligence rates Alexion's valuation 97/100 (extremely undervalued)! Today's headline from DJ Realtime News is, "Elliott Looks Forward to Continuing Dialogue With Alexion in Effort to Close Gap Between Current Share Price and Fundamental Value."
Go to YouTube and check out my "Wall Street Petting Zoo" video titled "How to Determine the Fair Value of a Stock." There I describe how to use the Zacks "Price and Consensus" chart to determine the fair value of a stock. By this standard, Alexion is conservatively worth $175 per share.
Analysts like Alexion. It has an 8.8/10 analyst summary score and an average price target of about $146.50 (versus the current price of about $113). S&P Global Intelligence rates it 85/100 for quality and 87/100 for financial health. Its growth stability earns a score of 62/100, which is great for a pharmaceutical company. Alexion has a nice, diverse portfolio of products that gives it some resiliency against changes in the demand for any one particular drug.
But the most attractive thing about Alexion stock is its valuation. The forward P/E of about 10 is very low for a stock with such extraordinary earnings growth. Analyst forecasts for Alexion's earnings have risen something like 25% over the last two years, but the share price has fallen over the same period. Moreover, Alexion has beaten estimates for every single one of the last 8 quarters. S&P Global Intelligence rates Alexion's valuation 97/100 (extremely undervalued)! Today's headline from DJ Realtime News is, "Elliott Looks Forward to Continuing Dialogue With Alexion in Effort to Close Gap Between Current Share Price and Fundamental Value."
Go to YouTube and check out my "Wall Street Petting Zoo" video titled "How to Determine the Fair Value of a Stock." There I describe how to use the Zacks "Price and Consensus" chart to determine the fair value of a stock. By this standard, Alexion is conservatively worth $175 per share.
Comment:
If we get a green close today, I will add to my position in ALXN.
Comment:
This did get a green close, and it's at a nice support level. The 8.8/10 analyst rating has risen to 9/10. I'd say it's time to buy Alexion on the cheap.
Comment:
The earnings forecast rose significantly today.
