Telix Pharmaceuticals Ltd (ASX: TLX) shares have had a tough time over the past 12 months.
During this time, the radiopharmaceuticals company's shares have lost 65% of their value.
While this is disappointing, Bell Potter believes that it could have created a compelling buying opportunity for investors.
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What is the broker saying?
Bell Potter notes that Telix has released its half-year results this month and reported a drop in earnings. It said:
(US$m) TLX delivered 56% revenue growth inclusive of 20% organic revenue growth in Precision Medicine. Group EBITDA declined by 41% to $39.5m and the company reported a statutory loss of $7.1m. Excluding non-cash revaluation charges in finance costs, adjusted NPAT ~$19.6m.
Looking ahead, the broker is feeling optimistic thanks to the company's development pipeline. It adds:
The company will remain focussed on pipeline development for at least FY27/FY28. The priorities are development of therapy assets with the four ongoing clinical trials (prostate cancer, glioma, renal and metastatic bone) and the imaging study in prostate (BiPass) all of which are now enrolling patients, hence the next two years are expected to deliver plenty of data. Beyond 2028 there are multiple targets to pursue, hence there won't be any easing up on R&D spend.
It was also pleased to see management guiding to solid revenue growth in FY 2026, excluding any contributions from potential approvals. Bell Potter explains:
Guidance is for FY26 revenues in the range of $950m-$970m before the impact of any new approvals. Our most recent forecast was $925m, hence the forecast is bullish and assumes ongoing market share gains and conversion of existing Illuccix clients to the higher reimbursed Gozellix product. The bottom end of the guidance is 2% ahead of the market. Our FY26 revenue forecast is unchanged at this time.
Time to buy Telix shares?
According to the note, Bell Potter has retained its buy rating on Telix shares with a reduced price target of $19.00.
Based on its current share price of $10.43, this implies potential upside of 82% for investors over the next 12 months.
Commenting on its buy recommendation, Bell Potter said:
FY25 was a challenging period by virtue to the two CRLs from the FDA and a stream of negative news flow – most recently the sudden resignation of the Chairperson. Nevertheless, the clinical programs are ongoing, and the company is well funded to continue these. We expect more of the same in CY26 minus the regulatory setbacks. The outlook for long term revenue growth remains encouraging and in the short term the guidance is not unrealistic. Short term catalysts include data readouts from Prostact Global. We expect to see the Pixclara BLA resubmitted within weeks.
