Based on our DCF-derived intrinsic values, our target price is $153. We calculate a DCF-derived Intrinsic Value by projecting free cash flows to 2030, thereafter applying terminal growth assumptions. Consistent with our sector methodology, we use the CAPM to calculate the cost of equity. We use WACC of 8.3% and assume a 1% terminal growth rate.

There are risks to our target price. On the upside: 1) better-than-expected penetration of Leqembi in the MCI and AD population; 2) better-than-expected penetration of Skyclarys in the FA population; 3) better-than-expected penetration of Zurzuvae in the PPD population; 4) better-than-expected data on Spinraza; and 5) less-than-expected erosion of the MS franchise. On the downside: 1) worse-than-expected penetration of Leqembi in the MCI and AD population; 2) worse-than-expected penetration of Skyclarys in the FA population; 3) worse-than-expected penetration of Zurzuvae in the PPD population; 4) worse-than-expected data on Spinraza; and 5) greater-than-expected erosion of the MS franchise.