On Wednesday, Biogen Inc. (NASDAQ:BIIB) shares edged slightly higher after announcing its most recent quarterly results. The company reported better-than-expected fiscal Q3 revenue and earnings whilst also boosting its full-year 2021 guidance.
The Cambridge MA-based biotech posted FQ3 non-GAAP earnings per share of $4.77, beating the average for analyst expectations of $4.09. However, its GAAP EPS of $2.22 missed Street estimates by 1.34, while revenue for the quarter of $2.78 was $110 million ahead of estimates despite plunging by 17.8% year-over-year.
BIIB boosted its fiscal full-year 2021 EPS guidance to $18.85-$19.35 from $17.50-$19.00, ahead of the consensus Street forecast of $18.56.
Biogen shares have swung to a net year-to-date gain of about 11%, substantially below the S&P 500 Index’s gain of 22.53%, after plummeting by more than 35% over the last four months.
Biogen looks undervalued
From an investment perspective, Biogen shares trade at a compelling forward P/E ratio of 13.14, making the stock an attractive option for value investors.
However, with analysts forecasting an earnings decline of more than 21% this year, before further decelerating at an average annual rate of about 7%, growth investors may opt for alternatives in the market.
Therefore, although the stock looks significantly undervalued, it may not be time to buy given its expected earnings decline.
Source – TradingView
Technically, Biogen shares seem to have recently plummeted to trade closer to the oversold conditions of the 14-day RSI. However, the stock also appears to have found solid trendline support, putting it in a position for a rebound.
Therefore, given Wednesday’s exciting earnings report, the stock could make a short-term rebound within the descending channel, thus creating profit targets at about $285.11 and $305.59.
However, if the earnings report fails to trigger a rebound, the extended declines could find support at $255.93, or lower at $238.71.
BIIB could be a good short-term buy
In summary, although Biogen issued a better-than-expected earnings forecast, the current downward trend seems poised to continue amid a lack of solid growth catalysts.
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