Vertex Pharmaceuticals initiated with an Outperform at Wolfe Research

Wolfe Research initiated coverage of Vertex Pharmaceuticals with an Outperform rating and $515 price target. The company’s cystic fibrosis franchise is durable and should continue to drive profitability for Vertex Pharmaceuticals, the analyst tells investors in a research note. Wolfe adds that it is modeling the new launches conservatively but also sees “clear rationale” for upside surprises, and while the stock is trading at a premium enterprise value to expected EBITDA, it is justified given that the company has the highest cash flow margin among peers.