On Thursday, Wolfe Research simultaneously upgraded Biogen and AbbVie to Outperform, assigning both pharmaceutical companies $300 price targets. The firm said the upgrades were driven by strong drug development pipelines, attractive valuations, and anticipated clinical trial results. The dual upgrade stands out at a time when large-cap pharmaceutical companies are navigating revenue pressure from patent expirations and biosimilar competition across the sector.

Biogen's Late-Stage Pipeline Supports a More Positive View

Wolfe Research said Biogen shares have been trading below broader market valuations, a gap the firm believes does not reflect the potential of the company's development portfolio. Biogen has faced investor skepticism in recent years, partly tied to the slow commercial uptake of its Alzheimer's therapy Leqembi, developed with partner Eisai, which has weighed on sentiment despite regulatory approval. The analyst firm raised Biogen from Peer Perform to Outperform and set a $300 price objective.

The bullish case centers on two late-stage drug candidates. Litifilimab could become the first biologic approved for cutaneous lupus erythematosus, while felzartamab could address antibody-mediated rejection, a market opportunity analysts may be underestimating.

Biogen's recent acquisition of Apellis Pharmaceuticals also supports its near-term revenue outlook through two marketed products, Empaveli and Syfovre.

The company recently reported earnings that topped expectations. Biogen posted adjusted earnings per share of $3.60, compared with the $2.94 Wall Street consensus, and revenue of $2.74 billion, up 3.4% from a year earlier. Management guided full-year 2026 adjusted earnings per share to between $12.00 and $13.00.

Institutional investors hold 87.93% of Biogen's outstanding shares. During the second quarter, Handelsbanken Fonder increased its stake by 12.7% to 93,236 shares, worth about $20.14 million.

Analysts currently maintain a Moderate Buy consensus on the stock, with an average price target of $224.61. Biogen shares opened Thursday at $208.87, near the 52-week high of $219.72. Wolfe's $300 target implies a substantial premium to both the consensus and current trading levels, suggesting the firm sees considerable upside that the broader market has not yet priced in.

AbbVie Cited for Growth, Valuation, and Patent Protection

Wolfe Research also raised AbbVie from Peer Perform to Outperform. The firm said AbbVie's forward 2027 price-to-earnings multiple of 14.6 times appears inexpensive for a company expected to deliver high-single-digit revenue growth through the rest of the decade. AbbVie has been working to replace revenue lost after Humira, once the world's top-selling drug, faced biosimilar competition in the United States beginning in 2023.

Patent protection was a key part of the upgrade. Generic competition for Rinvoq has been delayed until 2037, and AbbVie continues to defend the intellectual property around Skyrizi. Wolfe said that extended protection could reduce near-term patent cliff risk, a concern that has weighed on pharmaceutical valuations as several blockbuster drugs across the industry approach loss-of-exclusivity milestones later this decade.

AbbVie reported second-quarter revenue of $16.99 billion, an increase of 10.2% from a year earlier and above the $16.80 billion analyst estimate. Earnings per share came in at $3.65, slightly ahead of the $3.61 forecast.

Skyrizi and Rinvoq remain AbbVie's main growth drivers. In addition, Canada's Drug Agency issued a positive reimbursement recommendation for Ubrelvy for acute migraine treatment, which could create another revenue opportunity.

Shareholders recently approved AbbVie's acquisition of Apogee Therapeutics. The deal adds about $8 billion in debt, which some analysts have identified as a potential execution challenge.

Wall Street maintains a Moderate Buy consensus rating on AbbVie, with an average price target of $274.33. The shares opened Thursday at $249.12.

The article Biogen (BIIB) and AbbVie (ABBV) Receive Rare Double Upgrades: What Investors Need to Know originally appeared on Blockonomi.