Lundbeck (Buy, TP: DKK56.00) - Focusing on strategic brands

The Q3 sales beat reflected a strong result in strategic brands, leading to an outperformance on adj. EBITDA. We expect continued momentum in strategic brands, with Q4e sales growth of 17.4% YOY. The 2024 guidance was narrowed for CER revenue growth of 12–14% (previously 11–14%) and CER adj. EBITDA growth of 17–20% (15–20%) and we find the top end of the guidance reachable. We reiterate our BUY and DKK56 target price.

Lundbeck (Buy, TP: DKK56.00) - Strategic brands in focus

Lundbeck recently released company consensus for Q3. Our revenue forecast of DKK5,502m is c0.5% above, driven by strategic brands (we estimate 21.6% revenue growth YOY), and we forecast an adj. EBITDA margin of 29.4% (consensus 28.9%). We expect the 2024 guidance for 11–14% revenue growth and 15–20% adj. EBITDA growth at CER to be unchanged. We reiterate our BUY and DKK56 target price.

Lundbeck (Buy, TP: DKK56.00) - New adj. EBITDA margin target

At its CMD, Lundbeck extended its financial targets to include 2027, revised its adj. EBITDA margin target to 30%+, and guided for peak sales of cDKK9bn for Vyepti and USD1.3bn+ for Rexulti. Lundbeck provided an update on its proposed acquisition of Longboard Pharmaceuticals and R&D. We reiterate our BUY and have raised our target price to DKK56 (55).

Lundbeck (Buy, TP: DKK55.00) - Executing on M&A agenda

Ahead of the CMD due on 23 October, Lundbeck today announced the intention to acquire Longboard Pharmaceuticals for USD2.5bn, and its late-stage asset bexicaserin for the treatment of Developmental and Epileptic Encephalopathies (DEEs). We view the proposed acquisition as neutral, but believe Lundbeck’s M&A track record is better than the market perceives. We reiterate our BUY, but have raised our target price to DKK55 (52) on a greater Vyepti sales potential.

Lundbeck (Buy, TP: DKK52.00) - Solid momentum building

Q2 sales beat our forecast due to strategic brands and adj. EBITDA. The 2024 guidance was raised for revenue growth at CER to 11–14% (previously 7–10%) and adj. EBITDA growth at CER to 15–20% (10–16%), with underlying growth even stronger. We reiterate our BUY and have raised our target price to DKK52 (48).

Lundbeck (Buy, TP: DKK48.00) - Set for strategic brands momentum

We forecast Q2 revenue of DKK5,302m (c0.8% above consensus), driven by strategic brands (for which we forecast 19.3% revenue growth YOY), and an adj. EBITDA margin of 29.9% (consensus 29.3%). We expect the 2024 guidance to be raised for YOY LCY revenue growth of 9–12% (7–10%) and LCY adj. EBITDA growth of 11–17% (10–16%). We reiterate our BUY and have raised our target price to DKK48 (44).

Lundbeck (Buy, TP: DKK48.00) - Set for strategic brands momentum

We forecast Q2 revenue of DKK5,303m (c0.8% above consensus), driven by strategic brands (for which we forecast 19.3% revenue growth YOY), and an adj. EBITDA margin of 29.9% (consensus 29.3%). We expect the 2024 guidance to be raised for YOY LCY revenue growth of 9–12% (7–10%) and LCY adj. EBITDA growth of 11–17% (10–16%). We reiterate our BUY and have raised our target price to DKK48 (44).

Lundbeck (Buy, TP: DKK44.00) - Good start to the year

The Q1 results beat our estimates and consensus, with a strong EBIT margin of 24.2%, benefitting from operating leverage. The 2024 guidance was revised on FX for reported revenue growth to c3%-points (c4%-points) lower than in constant exchange rate (CER) terms, and adj. EBITDA growth to c8%-points (c9%-points) lower than in CER. However, in CER terms it was maintained for revenue up 7–10% YOY and adj. EBITDA up 10–16% YOY. We reiterate our BUY and DKK44 target price.

Lundbeck (Buy, TP: DKK44.00) - Strategic brands off to a good start

We forecast Q1 revenues of DKK5,209m, c0.8% above consensus, driven by strategic brands, for which we forecast 15.0% revenue growth YOY, and an adj. EBITDA margin of 30.3% (consensus 29.7%). We expect unchanged 2024 guidance in constant exchange rate (CER) terms, but believe Lundbeck will revise its guidance for reported figures due to FX. We reiterate our BUY and DKK44 target price.

Lundbeck (Buy, TP: DKK44.00) - New guidance structure

Q4 sales and EBITDA missed our forecasts as strategic brands sales were soft. The 2024 guidance was also soft but in a new better structure, we believe, for revenue growth of 7–10% CER (-4% in DKK) and adj. EBITDA growth of 10–16% in CER (-9% in DKK). We also note the decision to move Lu AF82422 into phase III in MSA. We reiterate our BUY and DKK44 target price.

Lundbeck (Buy, TP: DKK44.00) - Focus on guidance and M&A

We expect Lundbeck to reach the high end of its 2023 guidance, and forecast Q4 revenue of DKK5,111m and adj. EBITDA of DKK929m. For 2024, we look for continued good growth across strategic brands (we forecast 12.9%), and we believe investors will focus on the M&A agenda to strengthen the late-stage pipeline. We expect the 2024 guidance to be for revenue of DKK21.0bn–21.6bn and EBITDA of DKK5.7bn–6.3bn. We reiterate our BUY and DKK44 target price.

Lundbeck (Buy, TP: DKK44.00) - Focus on progressing the pipeline

At Lundbeck’s R&D event in London yesterday, focus was on pipeline progression and its R&D commitment. Lundbeck believes two of the six discussed pipeline candidates could reach the market in 2029. In the coming years, we expect increased focus on acquisitions to strengthen the late-stage pipeline to facilitate timely new product launches before the ‘patent cliff’ (we estimate in 2029). We reiterate our BUY and DKK44 target price.

Lundbeck (Buy, TP: DKK44.00) - R&D event ahead

Despite a Q3 revenue miss, Lundbeck has narrowed its 2023 revenue guidance to DKK19.8bn–20.1bn but raised adj. EBITDA to DKK5.6bn–5.8bn, reflecting the Q3 beat on lower R&D costs. We expect the R&D event due on 30 November to be an eye-opener, as we believe most investors have assigned limited value to the pipeline. We reiterate our BUY and target price of DKK44.

Lundbeck (Buy, TP: DKK44.00) - Another increase to guidance likely

We expect Q3 top-line growth of 8.7% YOY (consensus 7.8%), driven by strategic brands, for which we forecast sales growth of 10.5% YOY, and an EBIT margin of 16.5% versus consensus of 15.5% (results due at 07:00 CET on 8 November). We expect the company to raise its 2023 guidance for revenue to DKK19.9bn–20.2bn (from DKK19.5bn–20.1bn) and for adj. EBITDA to DKK5.4bn–5.7bn (from DKK5.2bn–5.6bn). We reiterate our BUY and have raised our target price to DKK44 (41).

Lundbeck (Buy, TP: DKK41.00) - CEO leaving on a high note

Bowing out on a high note, CEO Deborah Dunsire unveiled robust Q2 sales and a solid beat on adj. EBITDA, prompting an increase in the 2023 revenue guidance to DKK19.5bn–20.1bn (from DKK19.4bn– 20.0bn) and adj. EBITDA to DKK5.2bn–5.5bn (from DKK5.1bn–5.4bn). We see a strong possibility of incoming CEO Charl van Zyl extending the run of raised guidance with the Q3 report, and reiterate our BUY and DKK41 target price.

Lundbeck (Buy, TP: DKK41.00) - Still too early to raise guidance

We forecast Q2 top-line growth of 9.1% YOY (consensus 7.9%), driven by strategic brands, for which we forecast 15.4% sales growth YOY, and an EBIT margin of 16.1% (consensus 15.7%). We expect an unchanged 2023 guidance for revenues of DKK19.4bn–20.0bn and adj. EBITA of DKK5.1bn–5.5bn, but see scope for Lundbeck to raise its guidance later this year. We reiterate our BUY and DKK41 target price.

Lundbeck (Buy, TP: DKK41.00) - Still too early to raise guidance

We forecast Q2 top-line growth of 9.1% YOY (consensus 7.9%), driven by strategic brands, for which we forecast 15.4% sales growth YOY, and an EBIT margin of 16.1% (consensus 15.7%). We expect an unchanged 2023 guidance for revenues of DKK19.4bn–20.0bn and adj. EBITA of DKK5.1bn–5.5bn, but see scope for Lundbeck to raise its guidance later this year. We reiterate our BUY and DKK41 target price.

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Lundbeck (Buy, TP: DKK41.00) - Q1 beat, FDA approval of AAD

Robust Q1 sales growth of 15.4% YOY and lower R&D costs YOY (16.6% R&D-to-sales versus 22.4% last year) represented a strong start to the year. The FDA has approved Rexulti in Alzheimer’s agitation disease (AAD), and we expect a US launch in H2 with Lundbeck’s share of peak sales of USD562m in 2028e. Lundbeck kept its 2023 revenue guidance and introduced adj. EBITDA guidance of DKK5.1bn–5.4bn (we forecast DKK5.3bn). We reiterate our BUY and DKK41 target price.

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