Lundbeck Earnings: Strong Demand for Strategic Brands Drives Growth; Shares Undervalued

Lundbeck reported a solid start to 2024, highlighted by revenue of DKK 5.28 billion, representing 5% growth from the prior-year period. Strong performance from Lundbeck’s strategic brands (Rexulti, Abilify Maintena, Vyepti, and Trintellix) accounted for DKK 3.75 billion of sales, growing 15% from the first quarter last year. Investors reacted favorably, sending the stock up nearly 6%. We maintain our fair value estimate of DKK 42.50 per share, and we view the stock as undervalued, currently trading in 4-star territory about 10% below our fair value estimate. We think shares look attractive for long-term investors with a high degree of risk tolerance.