It’s time for investors to buy the dip on Jazz Pharmaceuticals , according to Goldman Sachs. The investment bank initiated coverage of the pharmaceuticals stock with a buy rating, setting a 12-month price target of $169. That forecast implies shares could rally nearly 62% from their Tuesday closing price of $104.48. Jazz Pharmaceuticals has slipped 15% this year. Analyst Andrea Tan thinks that this underperformance has now opened up an attractive entry point for investors. JAZZ YTD mountain JAZZ year to date “JAZZ is currently trading at a relatively higher discount to the S & P 500 on a [forward enterprise value-to-EBITDA] basis, suggesting the market is pricing in a high degree of uncertainty over future earnings power due to questions on sustainable revenue growth given competitive threats to the commercial business, particularly the potential decline to the oxybate business,” she wrote. “In our view, this is overdone as the fundamentals of the business are strong, and we are positive on the near- and long-term outlook.” Indeed, investors have grown concerned over Jazz’s potential loss of exclusivity and rising competition regarding oxybates, which reduces daytime sleepiness. But Tan cited the company’s “overlooked” pipeline as a potential offset for these expected losses. “We believe JAZZ is entering a period of growth from its late-stage pipeline, with upcoming catalysts serving as value inflection points for the name across oncology,” she wrote. An additional catalyst comes in the form of Vision 2025, Jazz’s strategic initiative launched in January 2022 to target $5 billion in revenue from 2025. Taking recent sales and near-term catalysts into consideration, the analyst wrote that she sees Vision 2025 as achievable. Jazz’s balance sheet also looks strong, and the company has demonstrated a consistent history of cash generation, according to the analyst. Tan believes that this bodes well for the company’s future investments in external innovation through mergers and acquisitions or business development.
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