Jazz Pharmaceuticals' (JAZZ) shares are up about 45% year to date, but may still have the potential for moderate further appreciation, RBC Capital Markets said in a note Friday.
As the company gradually enters a "more fulsome biotech era," its shares will likely "continue to re-rate, driven by higher-growth opportunities" like the one offered by its cancer drug Ziihera, the note said.
RBC said that while some cash flow analyses may indicate that the company's shares are fairly valued, it believes that the stock may see more upside, which would take it closer in line with biotech firms, due to its "ongoing momentum, still relatively undemanding multiple, and further balance sheet optionality."
The investment firm also said that it is now more accurately reflecting the value of Jazz's cancer drug Ziihera by including the drug's "pan-tumor potential," which RBC believes may contribute about $500 million by 2035, as well as modeling a recent financing.
RBC has an outperform rating on Jazz and lifted the company's price target to $299 from $277.
Price: $246.55, Change: $-4.55, Percent Change: -1.81%