On Thursday, H.C. Wainwright adjusted its price target on shares of United Therapeutics Corp . (NASDAQ:UTHR) to $400, up from the previous $300, while maintaining a Buy rating on the stock.
The firm's analyst cited updates to their financial model reflecting the details of the accelerated share repurchase (ASR) program that United Therapeutics announced during its first-quarter 2024 earnings.
United Therapeutics recently provided more information on their ASR, stating that while 80% of the shares were delivered by the end of the first quarter, the bank handling the repurchase is actively buying back shares daily.
This will continue through the end of September to fulfill the bank's short position. To date, the bank has not reached the 80% threshold, and its daily repurchase volume represents about 10% of United Therapeutics' total daily trading volume.
The company elaborated on the structure of the ASR, revealing it includes two separate tranches. The first tranche, valued at $300 million, concluded at the end of June, and the second, a larger $700 million tranche, is scheduled to close by the end of September.
The impact of these transactions will be reflected slightly in the company's second and third-quarter share counts, with the full effect expected to be seen in the fourth quarter of 2024.
The analyst's optimistic outlook and the raised price target are based on these recent developments within United Therapeutics' ASR program. The firm believes that the finalization of the ASR will have a significant impact on the company's share structure in the latter part of the year.
In other recent news, United Therapeutics Corp. reported a significant 34% year-over-year revenue growth in the first quarter of 2024, primarily driven by its drug Tyvaso, which saw revenues surge to $373 million. These recent developments also include the election of Jan Malcolm, former Minnesota Commissioner of Health, to its Board of Directors.
Analysts have also been adjusting their outlook on the company. TD Cowen raised the price target for United Therapeutics to $350, reiterating a Buy rating, while Morgan Stanley (NYSE:MS) downgraded the stock from Overweight to Equalweight, despite raising the price target to $321.
BofA Securities revised its price target for the company to $262, maintaining an Underperform rating. Oppenheimer maintained its Outperform rating and increased the target price to $400. Additional developments include United Therapeutics' progress in clinical trials and organ manufacturing initiatives, specifically in xenotransplantation, and the initiation of a $1 billion accelerated share repurchase program, expected to conclude by the end of Q3 2024.
InvestingPro Insights
Following H.C. Wainwright's positive adjustment of United Therapeutics Corp.'s (NASDAQ:UTHR) price target, InvestingPro data further illuminates the company's robust financial status. United Therapeutics holds an attractive P/E ratio of 14.86, which is even more compelling when considering the adjusted P/E ratio for the last twelve months as of Q1 2024 stands at 14.28. This valuation metric is supported by a notable gross profit margin of 88.87% over the same period, showcasing the company's efficiency in managing its costs.
The company's strategic financial management is also evident in its aggressive share buyback program, as highlighted by one of the InvestingPro Tips. This initiative not only reflects management's confidence in the company's value but also directly benefits shareholders by potentially increasing earnings per share. Additionally, United Therapeutics' strong liquidity position is emphasized by another InvestingPro Tip, which points out that the company holds more cash than debt on its balance sheet, providing it with financial flexibility and resilience.
Investors seeking more in-depth analysis can uncover a wealth of additional InvestingPro Tips for United Therapeutics, including insights on earnings revisions, shareholder yield, and stock volatility. For those interested, InvestingPro offers a comprehensive list of 16 further tips that can be accessed through the platform. To enhance your investing strategy, consider using the coupon code PRONEWS24 to receive up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing you with an even richer set of data and analytics to inform your investment decisions.
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