Zacks Investment Research downgraded shares of Regeneron Pharmaceuticals, Inc. (REGN) from OUTPERFORM to UNDERPERFORM on August 26, 2014, with a target price of $316.00.
We are downgrading Regeneron to Underperform following its earnings miss by a wide margin in the second quarter of 2014. The company's reported earnings of $1.89 per share were well short of the Zacks Consensus Estimate of $2.33 due to higher costs. Regeneron's earnings estimates for 2014 and 2015 have gone down following the disappointing bottom-line performance. Though impressed by the rebound in U.S. sales of Eylea in the second quarter from a disappointing first quarter, we believe that sales of the eye drug will have to improve significantly in the remaining quarters in order to meet the 2014 guidance of $1.7 billion to $1.8 billion. We believe that there is significant scope for stock price depreciation from current levels and advise investors to get rid of it.
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