We are maintaining our Neutral recommendation on
) with a target price of $100.00. The stock carries a Zacks Rank
#2 (Buy) in the short run.
Celgene disclosed its third quarter 2012 results in Oct 2012. The
company earned $1.14 per share on an adjusted basis during the
quarter, approximately 27% higher than the year-ago earnings.
Higher revenues drove earnings in the third quarter of 2012. The
Zacks Consensus Estimate was $1.16 per share.
Total revenue climbed 13.6% to $1.42 billion in the third quarter
of 2012. Revenues were boosted by the impressive performance of
Revlimid and Vidaza. Revenues edged past the Zacks Consensus
Estimate of $1.41 billion. Net product sales climbed 16% to $1.34
Earlier this month, Celgene provided encouraging guidance for
2013. Celgene expects adjusted earnings per share for 2013 in the
range of $5.50-$5.60, up 12-14% over expected earnings of $4.90
in 2012. Net product sales for 2013 are expected to be
approximately $6 billion, up 11.4%.
Celgene also provided an upbeat long-term forecast. The
company projects net product sales of $12 billion and adjusted
earnings in the range of $13.00 - $14.00 for 2017. Celgene
expects to release encouraging results for the fourth quarter of
2012 on Jan 24.
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Though impressed with the overall oncology portfolio at Celgene,
we remain concerned about the decline in the sales of cancer
drug, Thalomid. The continuing decline in Thalomid sales has the
potential to hurt Celgene's top line if other products do not
perform impressively enough. We are also concerned about the loss
of exclusivity of key drug Vidaza in the US. In view of these
challenges, we maintain our Neutral view on the stock.
Other Stocks to Consider
While we prefer to remain on the sidelines on Celgene, other
stocks in the pharma sector such as
), which carry a Zacks Rank #1 (Strong Buy), are worth