Cantor Fitzgerald maintains Overweight on Zealand Pharma shares

Cantor Fitzgerald reaffirmed its Overweight rating on Zealand Pharma (ZEAL) with a price target suggesting a potential 90% upside, driven by the inclusion of the Roche collaboration for obesity treatment petrelintide in their financial model. The firm estimates peak risk-adjusted sales for petrelintide could exceed $5 billion, citing Zealand Pharma's comments on the drug's extended duration of effect and the company's strong gross profit margin. While Deutsche Bank lowered its price target to DKK485, Zealand Pharma anticipates a $1.4 billion upfront payment from Roche in Q2 2025, boosting its cash position significantly.

Analysis

Cantor Fitzgerald has reaffirmed its Overweight rating on Zealand Pharma A/S (NASDAQ:ZEAL), driven by an updated financial model incorporating the recent collaboration with Roche for the obesity treatment petrelintide. Their sum-of-the-parts net present value (NPV) estimate for Zealand Pharma is approximately 790 Danish Krone (DKK), suggesting a significant potential upside of over 90% from current trading levels. This positive outlook is underpinned by anticipated peak risk-adjusted sales for petrelintide, which Cantor Fitzgerald conservatively estimates could exceed $5 billion, further supported by Zealand Pharma's comments on the drug's potential for an extended duration of effect. The company exhibits strong financial health, with an impressive gross profit margin of 93.39%, projected revenue growth of 146.46% for FY2025, and a robust current ratio of 25.1. A substantial financial boost is expected in the second quarter of 2025 from an anticipated $1.4 billion upfront payment from the Roche collaboration, which will significantly enhance Zealand Pharma’s cash position to approximately 18 billion DKK. While InvestingPro analysis indicates the stock is undervalued, Deutsche Bank has presented a more cautious view, lowering its price target to DKK485 from DKK750 and maintaining a Hold rating, citing minor, though reportedly immaterial, development delays for dapiglutide and survodutide. Zealand Pharma plans to provide further strategic updates at its Capital Markets Day in December 2025.

Key Decisions for Investors

• Investors should consider the substantial upside potential highlighted by Cantor Fitzgerald, primarily driven by the petrelintide development in collaboration with Roche, balanced against the more conservative outlook from Deutsche Bank.
• Monitor key catalysts closely, including the clinical trial progress for petrelintide, the realization of the $1.4 billion upfront payment from Roche in Q2 2025, and any strategic announcements from the Capital Markets Day in December 2025.
• Evaluate Zealand Pharma's strong gross profit margins and projected revenue growth against the inherent risks of drug development, including potential delays and the ultimate market acceptance of its pipeline candidates.