Morgan Stanley Downgrades Jazz Pharmaceuticals As Stock Approaches Price Target

Morgan Stanley analyst wants to move to the sidelines on Jazz Pharmaceuticals PLC JAZZ as the stock has gained around 34 percent year-to-date and approached his price target of $183.

The Analyst

Morgan Stanley's David Risinger downgraded the stock from Overweight to Equal-Weight.

The Thesis

The strong year-to-date performance was driven by solid Xyrem growth, rising enthusiasm for the pipeline and anticipation of M&A, the analyst said in a note. He didn't make any changes in his financial model and still expects 2018 results in line with the consensus. He projects 2018 revenues of $1.9B and non-GAAP EPS of $13.12. Risinger sees 2019 results slightly above the consensus as he projects the revenue of $2.2B and EPS of $15.45, while the market expects revenue of $2.1B and EPS of $15.17.

The analyst expects FDA approval of JZP-110 in December, which should add $60 million of revenue in 2019 for the company. He sees peak sales potential for the new drug at more than 500 million.

Price Action

Jazz Pharmaceuticals fell about 1 percent Wednesday to $179.37.

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