## Biogen Surprises With Strong Q3 Earnings, But Shares Slide Despite Upbeat Outlook
Biogen Inc. (BIIB), a leading biotechnology company, delivered a positive surprise in its third-quarter earnings report, exceeding analysts’ expectations on both earnings and revenue. Despite this strong performance, the company’s shares dipped on Thursday, likely due to investor concerns about future growth prospects.
The company reported adjusted earnings per share (EPS) of $4.08 for the quarter, a 6% decrease compared to the previous year but beating the consensus estimate of $3.79. Revenue came in at $2.47 billion, a 3% decline year-over-year on a constant currency and reported basis, still surpassing the expected $2.43 billion.
Biogen’s optimistic outlook for 2024 appears to be driving the mixed investor reaction. The company raised its adjusted EPS guidance for next year to a range of $16.10 to $16.60, surpassing the previous guidance of $15.75 to $16.25 and the consensus estimate of $16.19. Biogen also anticipates a low-single-digit percentage decline in revenue for 2024, with core pharmaceutical revenue expected to remain relatively flat compared to 2023. This anticipated stability is attributed to expected increases in revenue from new product launches, offsetting further declines in multiple sclerosis product revenues.
Looking ahead, Biogen anticipates significant growth in operating income, expecting a high-teen percentage increase for 2024 compared to 2023. The company also projects a mid-single-digit percentage point improvement in operating margins.
Despite the positive earnings report and optimistic outlook, Biogen’s shares fell by 2.5% on Thursday to close at $176.55. This decline reflects the mixed sentiment among analysts regarding the company’s future prospects.
Following the earnings announcement, analysts made adjustments to their price targets for Biogen shares. Morgan Stanley analyst Matthew Harrison downgraded Biogen from Overweight to Equal-Weight and lowered his price target from $285 to $204. Meanwhile, TD Cowen analyst Phil Nadeau maintained a Buy rating but reduced his price target from $300 to $275.
Other analysts remained bullish on Biogen’s prospects. Needham analyst Ami Fadia reiterated her Buy rating and maintained a $270 price target, while HC Wainwright & Co. analyst Andrew Fein also reaffirmed his Buy rating and kept a $300 price target.
The divergence in analyst opinions highlights the uncertainty surrounding Biogen’s future performance. While the company’s recent earnings beat and positive guidance are encouraging, the declining revenue in core areas and the ongoing challenges within the multiple sclerosis market present significant hurdles for the company. Investors are likely weighing these factors when determining their outlook for Biogen’s stock.
