UBS Lowers Price Target on Jazz Pharmaceuticals

UBS analysts reduced their price target on Jazz Pharmaceuticals (NASDAQ:JAZZ) to $113 from $117, while maintaining a Neutral rating on the stock. The analysts pointed out that the stock's performance is heavily dependent on capital allocation and its performance in 2024, both of which they view as potentially disappointing.

Regarding capital allocation, the analysts suggested that while Jazz aims to achieve its Vision 2025 through mergers and acquisitions, a significant share repurchase could be a more favorable strategy for boosting the stock. They noted that share buybacks are at a high in the broader market and have been positively received by investors in other biopharma companies that have executed significant buybacks.

For fiscal year 2024, the analysts expressed concerns about Jazz's ability to meet its guidance midpoint, particularly due to ongoing pressure on its Sleep franchise. Their estimates for Q2/24 earnings and the full year are at the lower end of Jazz's guidance and below Street expectations.