6 BIOCON share price target reports by brokerages below. See what is analyst's view on BIOCON share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
COVID-19 LOCKDOWN PULLS THE PERFORMANCE OF BIOLOGICS DIVISION Biocon reported a tepid performance for Q4FY20 mainly on account of the one-off impact of the lockdown on the sales of Biologics (including Small Molecules) business; Biologics reported YoY de-growth of ~3% at Rs. 898 cr. on account of the logistics related issues due to lockdown to prevent the spread of CoVID-19 while other two businesses viz., Branded formulations and Research together has posted YoY growth of 9%. Management is confident of improved performance post opening up of the economy; management expects Q1FY21 to be better than Q4FY20 and growth to return by Q2FY21. We remain positive on the business prospects of Biocon, and it‘s launch pipeline and recommend BUY rating with price target of Rs 474, thus providing upside of 45%.
Biocon has shared an aspirational target of reaching US$1bn in biologic revenue by FY22. Our forecasts for biologic revenue stand at US$650mn by FY22. Assuming the $1bn revenue target is met, the same will translate into an earnings upside of Rs5 per share to our FY22 EPS estimate of Rs12.3. We refrain from revising our estimates to guided targets as they remain contingent on timely / successful execution and potentially underestimate risks arising from any competitive response to Biocon launches and regulatory uncertainties. Innovators would look to defend their market share aggressively, unlike in case of small molecules, as capital costs are significant in case of biologics and facilities are not as fungible. We retain our estimates and recommend a Sell with a target price of Rs272 (22x FY22 EPS).
Over FY19-22, we expect earnings CAGR of 28%, led by a CAGR of 36% in Biologics and 17% in Small molecules, with a 360bp margin improvement. We continue valuing BIOS at 25x and roll our TP to INR300 (prior: INR305) on 12M forward earnings basis. Maintain Neutral.
Biocon has shared an aspirational target of reaching US$1bn in biologic revenue by FY22, which implies more than trebling of existing revenue base. Our existing forecasts assume biologic revenue reaching US$650mn by FY22. Assuming the target is met, this would imply a US$350mn upside to our estimate and would potentially translate into an earnings upside of Rs5 per share to our FY22 EPS estimate of Rs12.3. We refrain from revising our estimates to guided targets as they remain contingent on timely / successful execution and potentially underestimates risks arising from any competitive response to Biocon launches and regulatory uncertainties (approval and manufacturing compliance related). Innovators would look to defend their market share aggressively, unlike in case of small molecules as capital costs are significant in case of biologics and facilities are not as fungible. We also do not model an upside from any biologic launch in China market, which potentially can happen only in FY23. We have tweaked our estimates and retained the target price as Rs252 at 22x September FY22 EPS but due to recent run-up in price we revise the rating to Sell (from Accumulate earlier).
Backed by a strong pipeline (28 products under development) and expected new launches, we expect biologics growth momentum to sustain. The management is confident of achieving US$1 billion biological revenues by end of FY22. With better visibility, the company has optically accelerated the scalability capex and R&D, which is likely to push related expenses higher in the near term. Timely launches and ramp up of biosimilars in the developed as well as EMs and Syngene’s performances remain key levers for the company. That said, concerns about lower-than-expected PE valuation in biologics and holding company discount are likely to weigh in the near term. On an SoTP basis, we maintain target price of Rs 310 per share.
We expect earnings to grow at healthy 34.6% CAGR over FY19-21E. Increasing R&D investment should support topline with new product launches and continued growth across the segments. However, concerns remain over FDA approvals for new facilities. We provide a HOLD rating on the stock with a target price of Rs. 260 based on ~24x FY21E adj. EPS.
Biocon 2QFY20 net earnings were lower than our expectations as margins of biologic business slipped on account of lower share of high margin US business and also higher R&D expense during the quarter. R&D expense should remain elevated as the company would continue to spend on augmenting the biosimilar pipeline. Biocon has shared an aspirational target of reaching US$1bn in biologic revenue by FY22, which implies more than trebling of existing revenue base. Our existing forecasts assume biologic revenue reaching US$650mn by FY22. Assuming the target is met, this would imply a US$350mn upside to our estimate and would potentially translate into an earnings upside of Rs5 per share to our FY22 EPS estimate of Rs12.3. We refrain from revising our estimates to guided targets as they remain contingent on timely / successful execution and potentially underestimates risks arising from any competitive response to Biocon launches and regulatory uncertainties (approval and manufacturing compliance related). Innovators would look to defend their market share aggressively, unlike in case of small molecules as capital costs are significant in case of biologics and facilities are not as fungible. We also do not model an upside from any biologic launch in China market, which potentially can happen only in FY23.
Backed by a strong product pipeline (28 products under development) and expected new launches, we expects biologics growth to remain strong. The management is confident of achieving US$ 1 billion biological revenues by the end of FY22 (~US$140 million in H1FY20). With better visibility, the company has optically accelerated the scalability capex and R&D, which is likely to push related expenses higher in the near term. Timely launches and ramp up of biosimilars in the developed countries as well as EMs andSyngene’s performances remain key levers for the company. On an SoTP basis, we ascribe a target price of Rs 310/share.
Valuation: We like Biocon for its long term earnings visibility, strong traction in biologics segment, healthy launch pipeline of biosimilar coupled with increasing market penetration of the existing products. In our view, Biocon is well placed to play the first mover advantage in evolving biosimilar market. Maintain BUY. We have revised our target price to Rs300 (Rs320 earlier) based on SoTP valuation. We expect robust earnings growth of ~30% EPS CAGR over FY19-21E. At CMP, the stock is trading at a PE of 32x/23x on FY20/FY21 earnings.
We continue to expect company to get benefits of first wave of Biosimilar commercialisation in the next two years which should drive higher revenues and margins. We have updated our financials reflecting latest quarterly numbers and continue to remain positive on the stock and maintain our BUY rating with a revised target price of ₹321 per share.
We have made minor changes to our estimates for Biocon based on 1QFY20 numbers/commentary. Biocon’s revenue and net profit growth should remain on positive trajectory in the near to medium term. The new launches should add to the topline, but existing high value launches (Fulphila) would be prone to price erosion as new competition enters market. We see challenges for biosimilar players including Biocon in gaining share in Trastuzumab. In view of the recent ~25% correction in the stock price we upgrade Biocon from Sell to Accumulate with a target price (TP) of Rs257 (adjusted for bonus issue), based on 22x FY21E earnings.
Like FY19, FY20 is also expected to be driven by growth segments i.e. 1) biologics mainly on the back of new launches across developed markets and geographical expansion in emerging markets and 2) Syngene on the back ofpersistent clients’ addition. With better visibility, the company has optically accelerated the scalability capex and R&D, which is likely to push related expenses higher in the near term. Biosimilar launches in developed as well as emerging markets and Syngene’s performances remain key levers for the company. On an SoTP basis, we ascribe a target price of Rs 330/share.
We remain positive on the stock on the back of strong prospects in both biologics and services (Syngene) segments. We believe the correction in the stock is overdone and the stock offers a compelling bet at the current level. We maintain our BUY recommendation on the stock. Our revised target price of Rs 330 is based on the SOTP methodology.
Robust FY19 numbers were primarily driven by growth segments i.e. 1) biologics mainly on the back of new launches across developed and emerging markets and geographical expansion in emerging markets and 2) Syngene on the back of persistent clients’ addition. With better visibility, the company has optically accelerated the scalability capex and R&D, which is likely to push related expenses higher in the near term. Biosimilar launches in developed as well as emerging markets and Syngene’s performances remain key levers for the company. On an SoTP basis, we ascribe a target price of Rs 730 per share.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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