Biogen (BIIB): As Rates Fall, This Strong Buy-Rated Stock Could Benefit
Biotech stocks just got a tailwind. With the Fed cutting interest rates for the first time in years, capital is starting to flow back into risk assets … and biotech is one of the most rate-sensitive sectors out there.
The charts are telling us exactly that, with the S&P Biotech ETF (NYSEARCA: XBI) trying to take out that key $100 level … a resistance point it only previously breached during its epic 2021 run:
I like the technical setup here, because I think if we can grind past that $100 level and stay there, a similar run could be in the cards.
Individual names likely offer more upside than the ETF, but there’s one catch that’s especially important in biotech: most small-cap drug developers are pure speculation. They burn cash, have no products, and depend on endless funding rounds to survive.
So if you’re going to be a stockpicker in this sector, you need to be smart. That’s why I’m looking into a smarter way to play this biotech rebound by focusing on companies with real products and earnings … And I think it might be Biogen (NASDAQ: BIIB) … an A-rated name according to our Zen Ratings system.
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1. Real Products, Real Profits
Biogen isn’t a startup with one promising molecule. It already generates billions in revenue from its multiple sclerosis franchise and Alzheimer’s partnership (Leqembi). This means you’re getting a business with cash flow today, not just a distant pipeline story.
2. Dirt Cheap Valuation
Hype names like Moderna and CRISPR stocks trade at lofty multiples, but BIIB trades at a forward P/E in the single digits and a price-to-book near 1. That’s bargain territory for a profitable biotech of this size. That’s why BIIB scores an A in both its Value and Safety component grades.
You can see our other top value stocks right now here.
3. Rate Cuts Favor Stability + Optionality
Falling rates help speculative biotech, but they also increase the appeal of de-risked assets. BIIB offers both: a strong revenue base plus optionality in neurology and rare-disease drug development. As capital costs fall, that pipeline looks more valuable.
4. High Rating in Our System
Our Zen Ratings place Biogen among the top 3 stocks in the Drug Manufacturers industry right now … plus, the industry itself is currently A-rated. That’s backed by solid fundamentals and our quantitative outlook, not just sentiment alone.
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Biotech has been in a “new normal” since the Fed started hiking rates in 2022. Funding dried up, IPOs slowed, and the sector endured layoffs and restructurings.
Now, with rates falling, history suggests we’ll see renewed investor appetite. With BIIB, I think I’m betting on an established giant at a cyclical low point for valuations.
With its low valuation, strong fundamentals, and high Zen Rating, BIIB may be positioned as one of the best ways to play this sector’s rebound.
In short: real products, real profits, and a real bargain.
Click here to analyze BIIB stock.
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