BofA Securities has just added Argenx SE (NASDAQ: ARGX) to its prized US 1 List of top ideas. This makes it a strategic play for investors because BofA had just recently raised its price target ahead of earnings and its price objective is handily above-consensus from the rest of the analysts covering it.
Argenx SE is a Netherlands-based biotech company developing novel therapies in autoimmune diseases and cancer. One issue that should be addressed up front is that Argenx’s top drugs cover diseases and ailments which may not exactly be common widely-known drug targets. Its lead asset is efgartigimod, an FcRn antagonist currently approved for Myasthenia Gravis (MG) and in later stages of development for ITP, and Chronic Inflammatory Demyelinating Polyneuropathy (CIDP).
ANALYST GOES BIG & BOLD
BofA’s US 1 list represents a collection of the firm’s best investment ideas out of its Buy-rated universe from the fundamental equity research analysts. The list can include ADRs of foreign stocks that trade in the U.S. with a goal of superior investment performance over the long-term.
BofA had already just reiterated its Buy rating on July 15 as a preview ahead of earnings, also raising its price objective to $829 from $804 in the call. At $591.74 ahead of the US-1 List addition, BofA sees an implied upside of roughly 40% if its thesis plays out as expected. Argenx has a 52-week trading range of $473.67 to $678.21 and the consensus analyst price target was roughly $765 ahead of the call.
Oggonomics always reminds readers that a single analyst call should never be the sole reason to buy or sell a stock. That is particularly true for calls that are much more positive with higher targets than other analyst calls.
REAL EARNINGS, REAL VALUATION METRICS
The firm is now modeling Vyvgart revenues to be up 12% sequentially to $885 million. The firm is also looking for updated metrics on the CIDP launch, as well initial metrics on the PFS following approval in April. BofA is targeting revenues of $3.74 million for 2025 to rise to $4.718 billion in 2026 and to $5.658 billion in 2027. It also sees earnings (per share) at $16.52 in 2025, $29.67 in 2026 and $42.44 in 2027.
BofA’s Investment Rationale said:
We believe ARGX’s product pipeline is highly differentiated, targeting indications of high unmet medical needs. Efgartigimod is the first FcRn in MG and potentially several other autoimmune diseases. We also see significant upside potential from its partnerships and wholly owned early-stage pipeline assets, such as ‘117 in complement-mediated diseases and ‘118 in airway inflammation.
As for the valuations to get to an $829 price objective, this was a discounted cash flow-derived model based on estimates out to 2038 and peak penetrations of 10% to 35%. BofA’s valuation breakdown was assigned as follows:
- efgartigimod in Myasthenia Gravis ($433),
- Immune Thrombocytopenia ($8),
- Chronic Inflammatory Demyelinating Polyneuropathy ($238),
- pipeline and corporate expenses ($95),
- and cash ($56).
DISCLAIMERS
Please be advised that the analyst ratings and price targets mentioned above were issued by BofA Securities. Their ratings and targets are above-consensus versus other analyst calls. Analysts sometimes get their thesis and outlook wrong. And sometimes the fundamentals of a company, its sector or the economy as a whole can change in an instant.
Oggonomics does not have any formal ratings nor does not maintain any price targets of its own on Argenx nor on any related companies mentioned in this report. Interpretations of how positive or negative the analyst calls are can also wildly vary from investor to investor.
No analyst ratings and their price targets, even those with the strongest conviction or strongest pessimism, ever come with any guarantees of profits. Analyst reports also never have money-back guarantees in the event that investors lose money.
