Truist Securities lowered its 12-month price target for Neurocrine Biosciences (NASDAQ:NBIX) to $140 from $169, while keeping a Buy rating, according to an analyst update released Monday. The new target sits at the low end of analyst targets across the Street, per InvestingPro data.
The brokerage said it revised its financial model after Neurocrine reported fourth-quarter 2025 results and after management provided guidance for 2026. The principal driver of the reduced target was an upward revision to anticipated operating costs - most notably spending in research and development - which Truist said were higher than it had previously modeled. The firm expects these elevated spending levels to continue through 2028, and it adjusted its forecasts to incorporate that outlook along with other elements of management's guidance for the coming year.
Despite the price-target cut, analysis from InvestingPro cited in the update suggests the shares remain undervalued relative to the firm's Fair Value estimate. The stock had declined 9.83% over the prior week, and Truist highlighted a favorable PEG ratio of 0.62 as indicating an attractive valuation relative to growth.
On revenue specifics, Truist's view of 2026 Ingrezza sales aligned with management projections. Neurocrine's commentary during the guidance release reiterated confidence in the commercial trajectory for Crenessity, even though the drug has registered three consecutive quarters of declining new patient starts. Management did not provide a discrete sales guidance figure for Crenessity.
In the company's reported quarter, Neurocrine exceeded consensus on both earnings per share and total revenue. The firm posted EPS of $1.88, topping a forecast of $1.86, and reported revenue of $805.5 million versus an expected $802.45 million. Ingrezza sales for the quarter totaled $658 million, slightly under the FactSet consensus of $662 million.
Other broker activity following the results included Canaccord Genuity reiterating its Buy rating with a $164.00 price target, and H.C. Wainwright likewise maintaining a Buy rating while trimming its target from $198.00 to $192.00. H.C. Wainwright cited strong momentum, record prescriptions for Ingrezza, and a successful launch year for Crenessity as context for its view.
The combination of higher-than-expected operating expense guidance and mixed commercial data - an EPS and revenue beat alongside slightly weaker-than-consensus Ingrezza sales and declining new patient starts for Crenessity - underpins the analyst model changes. Truist's decision to keep a Buy rating while lowering the price target reflects an updated assessment of the company's near-term cost profile without altering its longer-term investment stance.
Key points:
- Truist cut Neurocrine's price target to $140 from $169 but preserved a Buy rating.
- Model revisions follow Q4 2025 results and 2026 guidance, with materially higher operating and R&D spending expected through 2028.
- Q4 results beat EPS and revenue expectations; Ingrezza sales were slightly below consensus while management affirmed confidence in Crenessity despite declining new patient starts.
Risks and uncertainties:
- Persistently higher operating expenses, especially in R&D, could pressure margins and valuation - impacting the biotech and pharmaceutical sectors.
- Three straight quarters of declining new patient starts for Crenessity introduce uncertainty around that drug's near-term commercial trajectory - affecting healthcare revenue forecasts.
- Near-term stock weakness, evidenced by a 9.83% decline over the past week, could reflect market sensitivity to guidance and expense revisions - relevant to equity market sentiment in biotech.