On Tuesday, RBC (TSX:RY) Capital adjusted its outlook on Legend Biotech Corp. (NASDAQ: LEGN) shares, increasing the price target to $86 from the previous $85 while maintaining an Outperform rating. The revision follows Legend Biotech's recent earnings report for the first quarter of 2024.
The firm's management team discussed the past quarter's performance and future prospects, indicating that the weaker results of the first quarter are now behind the company. RBC Capital anticipates that the demand for Carvykti, Legend Biotech's therapy, will grow in the second quarter.
Additionally, the completion of testing batches is expected to contribute to the product's growth. The analyst also pointed to the upcoming second-line (2L) launch and manufacturing expansion as key drivers for significant revenue increases in the second half of 2024.
Despite a 38% decline in Legend Biotech's shares since the highs of February, RBC Capital forecasts accelerating revenue growth moving forward. The firm now estimates that Legend Biotech's sales for the full year 2024 will reach approximately $926 million.
This projection is set against the backdrop of lower investor expectations, which, according to RBC Capital, could energize the stock and more clearly demonstrate the company's potential for a greater than $10 billion opportunity in the coming years.
The price target adjustment to $86 is attributed to updates in the financial model, signaling confidence in Legend Biotech's ability to recover and expand. RBC Capital's stance reflects a positive outlook for the biotechnology company's financial trajectory and market performance in the near term.
InvestingPro Insights
Legend Biotech Corp. (NASDAQ: LEGN) has been a focal point for investors following its recent earnings report and the subsequent price target update from RBC Capital. InvestingPro data shows that Legend Biotech holds a market cap of $7.82 billion, and despite not being profitable over the last twelve months, analysts are anticipating sales growth. The company's revenue growth has been impressive, with a surge of over 231% in the last twelve months as of Q1 2024, and a quarterly growth rate of nearly 159% in Q1 2024.
InvestingPro Tips for Legend Biotech highlight that the company is trading near its 52-week low, which could present a potential entry point for investors, based on the RBC Capital's optimistic outlook. Furthermore, the stock's Relative Strength Index (RSI) suggests it is in oversold territory, which might interest those looking for technical indicators of a rebound. Investors may find additional value in the fact that Legend Biotech holds more cash than debt on its balance sheet, indicating a strong liquidity position to support its ongoing operations and growth initiatives.
For those looking to delve deeper into Legend Biotech's financials and future prospects, InvestingPro offers additional tips and a fair value estimate of $54.1, which is below the analyst target of $87 but still above the previous close price of $42.97. Interested readers can unlock these insights and receive guidance on navigating the biotech market landscape with a subscription to InvestingPro. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to a wealth of knowledge including 11 more InvestingPro Tips for Legend Biotech.
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