Why This Bluebird Bio Analyst Sees Over 125% Upside Ahead

Shares of bluebird bio Inc BLUE are undervalued when weighed against the company's fundamentals, according to a Mizuho Securities analyst. 

The Bluebird Bio Analyst: Difei Yang initiated coverage of Bluebird bio shares with a Buy rating and $123 price target.

The Bluebird Bio Thesis: Bluebird has built a unique lentiviral-based gene therapy platform that's underappreciated by the market, Yang said in an initiation note.

The platform stands out due to its potential to enable significant value creation in both severe genetic diseases and oncology, the analyst said. 

The company's gene therapies have shown transformative durable clinical outcomes in multiple indications, including sickle cell disease, transfusion-dependent thalassemia, cerebral adrenoleukodystrophy and multiple myeloma, she said. 

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Significant market opportunities exist for therapies in these indications given that there are significant unmet medical needs, Yang said, citing key opinion leaders.

Mizuho estimates worldwide unadjusted peak sales of $2.4 billion for LentiGlobin in sickle cell disease.

The development of the first BCMA CAR-T cell therapy for multiple myeloma toward commercialization underscores the company's ability to develop new therapies in oncology, the analyst said.

"With multiple early-stage collaborations and internal investments in this area, we believe there is good upside optionality from exciting next-generation oncology assets including CAR-T and T-cell receptor (TCR) therapies in development for both liquid and solid tumors."

Mizuho sees Bluebird's valuation as attractive and its cash position of $1.6 billion at the end of the second quarter as sufficient for funding operations into the first half of 2023.

BLUE Price Action: At last check, Bluebird bio shares were advancing 1.34% to $55.28.

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