On Wednesday, Deutsche Bank (ETR:DBKGn) analysts issued a new rating for H Lundbeck A/S (HLUNB:DC) (OTC: HLUYY), downgrading the pharmaceutical company’s shares from Buy to Hold. Alongside the rating change, they also adjusted the price target from DKK53.00 to DKK44.00. The revision comes after a period of optimism that began with an upgrade in February 2024 and a confirmation of their positive stance in May of the same year.
The downgrade was prompted by a series of events that have led to a decline in Lundbeck’s investment narrative, particularly after the company’s CMD and acquisition of Longboard. The analysts noted that these recent developments have resulted in a significant drop in valuation, returning to levels seen 12 months prior.
Deutsche Bank’s original investment thesis for Lundbeck hinged on several key factors, including the long-term potential of Rexulti in the treatment of AAPAD, which they believe continues to progress. Additionally, the firm had a positive outlook on the approval of a PTSD treatment and saw enduring potential in Vyepti, a medication designed for the long-term treatment of migraines. The analysts also highlighted the promise of PACAP, a peptide linked to migraine pathology, which they anticipated could offer hope beyond the year 2030 in a growing market for migraine treatments.
Despite the downgrade, the analysts acknowledged that some of their foundational beliefs about Lundbeck’s prospects remain intact. They specifically mentioned the ongoing success of Rexulti as a key aspect of the company’s portfolio that continues to unfold as anticipated.
The adjustment in Lundbeck’s stock rating and price target reflects Deutsche Bank’s reassessment of the company’s recent performance and its impact on the investment outlook. This change by the analysts underscores the dynamic nature of the pharmaceutical industry and the various factors that can influence a company’s valuation and market position.
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