According to the Wisdom Financial APP, Wells Fargo & Co downgraded its rating on USA biotechnology company Halozyme Therapeutics (HALO.US) from "shareholding" to "in line with the large cap", with a target price of $62, stating that the stock has limited upside.

Halozyme Therapeutics stock price has risen 50% so far this year, while the S&P 500 index has increased by about 21%. As of Monday's close, Halozyme Therapeutics fell by 9% to $53.85.

The upcoming new product is one reason to hold Halozyme Therapeutics stocks, but Wells Fargo & Co believes that the market expectations have already reflected this, adding that the impact of key products Vyvgart, Opdivo, Ocrevus, and Tecentriq in the mid-term to provide growth momentum has been absorbed by the market, especially after Halozyme Therapeutics released its 2024-2028 guidance in early 2024.

Wells Fargo & Co expects the company's EPS for 2024/25 to be $3.81 / $4.69, while the market expects $3.98 / $4.75.

Furthermore, Wells Fargo & Co believes that the recent licensing agreement between Halozyme Therapeutics and argenx SE (ARGX.US) is positive in the long term, but that the Vyvgart royalties will decrease when the Enhanze patent expires in 2027 or 2029.

Wells Fargo & Co analyst stated: "This means Darzalex and Vyvgart, the two most important products, may be discontinued in the same year. Based on our model, these two products are expected to contribute about 58% of Halozyme Therapeutics' royalties by 2028.

However, analysts pointed out that the stock is undervalued due to the potential of franchise rights fees, and future trades may bring upward potential.

Last month, JPMorgan downgraded its rating of Halozyme Therapeutics from "shareholding" to "neutral", stating that its valuation is at a reasonable level.