A History of Outperforming Analyst Forecasts and Beating the Odds: Incyte Corporation (INCY)

Incyte Corporation (NASDAQ: INCY) stock fell -0.87% on Friday to $71.91 against a previous-day closing price of $72.54. With 1.51 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.5 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $73.16 whereas the lowest price it dropped to was $71.26. The 52-week range on INCY shows that it touched its highest point at $84.86 and its lowest point at $61.91 during that stretch. It currently has a 1-year price target of $91.88. Beta for the stock currently stands at 0.65.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of INCY was down-trending over the past week, with a drop of -8.77%, but this was down by -9.80% over a month. Three-month performance dropped to -10.91% while six-month performance fell -3.33%. The stock lost -7.02% in the past year, while it has lost -2.03% so far this year. A look at the trailing 12-month EPS for INCY yields 4.20 with Next year EPS estimates of 4.60. For the next quarter, that number is 0.76. This implies an EPS growth rate of 415.00% for this year and 43.81% for next year. EPS is expected to grow by 14.90% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 51.40%.

Float and Shares Shorts:

At present, 221.33 million INCY shares are outstanding with a float of 218.00 million shares on hand for trading. On Jul 14, 2022, short shares totaled 6.82 million, which was 3.08% higher than short shares on Jun 14, 2022. In addition to Mr. Herve Hoppenot as the firm’s Chairman, Pres & CEO, Ms. Christiana Stamoulis MBA serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 96.09% of INCY’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 50.05% of INCY, in contrast to 47.01% held by mutual funds. Shares owned by individuals account for 20.10%. As the largest shareholder in INCY with 16.56% of the stake, Baker Bros. Advisors LP holds 36,676,548 shares worth 36,676,548. A second-largest stockholder of INCY, The Vanguard Group, Inc., holds 20,127,472 shares, controlling over 9.09% of the firm’s shares. Dodge & Cox is the third largest shareholder in INCY, holding 18,060,290 shares or 8.15% stake. With a 5.51% stake in INCY, the Dodge & Cox Stock Fund is the largest stakeholder. A total of 12,195,000 shares are owned by the mutual fund manager. The Vanguard Health Care Fund, which owns about 4.06% of INCY stock, is the second-largest Mutual Fund holder. It holds 9,000,425 shares valued at 683.76 million. Vanguard Total Stock Market Index holds 2.50% of the stake in INCY, owning 5,545,907 shares worth 421.32 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for INCY since 21 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With INCY analysts setting a high price target of $119.00 and a low target of $63.00, the average target price over the next 12 months is $88.59. Based on these targets, INCY could surge 65.48% to reach the target high and fall by -12.39% to reach the target low. Reaching the average price target will result in a growth of 23.2% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. INCY will report FY 2022 earnings on 02/16/2023. Analysts have provided yearly estimates in a range of $3.48 being high and $1.61 being low. For INCY, this leads to a yearly average estimate of $2.18. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Incyte Corporation surprised analysts by $0.16 when it reported $0.72 EPS against a consensus estimate of $0.56. The surprise factor in the prior quarter was -$0.29. Based on analyst estimates, the high estimate for the next quarter is $0.72 and the low estimate is $0.39. The average estimate for the next quarter is thus $0.56.

Summary of Insider Activity:

Insiders traded INCY stock several times over the past three months with 22 Buys and 12 Sells. In these transactions, 177,864 shares were bought while 61,217 shares were sold. The number of buy transactions has increased to 114 while that of sell transactions has risen to 36 over the past year. The total number of shares bought during that period was 4,574,074 while 164,824 shares were sold.

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