Legend Biotech shares rise as analysts adjust price targets following Q1 miss
RBC Capital and TD Cowen raise forecasts while Morgan Stanley trims its outlook, as shares climb 1.3% to $28.63
Legend Biotech reported first-quarter results on Tuesday that fell short of Wall Street expectations, posting a loss of 3 cents per share against a consensus estimate of a 2-cent loss. The company also reported quarterly sales of $305.1 million, missing the consensus forecast of $307.035 million. Despite the miss, the stock gained 1.3% to trade at $28.63 on Wednesday.
The shortfall in earnings and revenue was met with mixed reactions from analysts, who adjusted their price targets in the wake of the announcement. RBC Capital analyst Leonid Timashev maintained an 'Outperform' rating but raised his price target from $62 to $64, citing the company's underlying strength.
Conversely, Morgan Stanley analyst Matthew Harrison kept an 'Overweight' rating but lowered his price target from $49 to $48. Meanwhile, TD Cowen analyst Yaron Werber maintained a 'Hold' rating but significantly raised his price target from $21 to $29, reflecting a more optimistic view on the firm's trajectory.
Chief Executive Officer Ying Huang attributed the company's strategic positioning to the continued adoption of CARVYKTI, a BCMA CAR-T therapy. Huang noted that strong year-over-year growth for the product reinforces Legend Biotech’s leadership in the sector and supports a path toward sustainable profitability.
Huang emphasised that increasing scale is driving operating leverage and improving margins, which he stated is enabling the company to advance its broader pipeline of cell therapy programs. The executive highlighted that these operational improvements are critical to extending the platform's impact across multiple indications.
The divergence in analyst sentiment highlights the complex valuation landscape for biotech firms reporting near-term losses. While some institutions see the margin improvements as a precursor to long-term value, others remain cautious, adjusting their targets to reflect the immediate earnings miss.
Legend Biotech's shares closing higher on Wednesday suggests that investors are weighing the near-term financial shortfall against the longer-term growth potential outlined by management. The price target revisions from major institutions will likely continue to influence market perception as the company executes on its scale-up strategy.
