DBV: Société Générale upgrades to buy; 82 euro target price.
(CercleFinance.com) - Société Générale (SG) has examined the FY accounts published by biotech company DBV Technologies, which the stockmarket shunned yesterday.
However, Société Générale upgraded its "hold" rating to “buy,” raising its 12-month target price from 66 euros to 82 euros.
Analysts believe that the stock's 2.7% drop yesterday is excessive, in reaction to the group's cash consumption (66 million euros last year), and the increase in its net loss (to 114 million euros, or 25% higher than what the market had been expecting): "the sharp increase in R&D costs comes as no surprise," the broker says in a report, which justifies the difference from forecasts.
Admittedly, SG has raised its forecasts for DBV's cash consumption from 113 million euros to 145 million euros in 2017, and from 115 million euros to 168 million euros in 2018. However, this "does not change our positive opinion on the stock," analysts say: DBV should still reach profit in 2020, with earnings expected at 134 million euros (vs. 154 million euros previously). Considering that in SG's opinion, the likelihood of seeing the candidate drug Viaskin being approved is now 70%, compared to 65% previously, given the results of the latest clinical trials.
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