Telix Pharmaceuticals Ltd (ASX: TLX) shares have been on an absolute tear over the past year, surging an incredible 175%.
And according to the team at Bell Potter, this high-flying ASX 200 share may have even more room to run.
This morning, the broker has upgraded its recommendation on the radiopharmaceuticals company and lifted its price target meaningfully following the release of its full year results.
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Why is the broker bullish on this ASX 200 share?
Despite a slight earnings miss with its FY 2024 results, Bell Potter sees enormous potential in Telix's expanding pipeline and strategic acquisitions.
It notes that the company recently released its results and revealed revenue of US$517 million (A$783 million), which was broadly in line with expectations. However, adjusted EBITDA of A$99.3 million came in 14% below consensus estimates.
Despite this, the market largely brushed off the earnings miss, focusing instead on Telix's strong growth outlook instead.
This is being underpinned by the acquisition of RLS Radiopharma, which is expected to contribute ~A$222 million in revenue, the launch of Pixclara, and the rapidly growing flagship product, Illuccix. The latter is forecast to grow its revenue by 24% to approximately A$1 billion in FY 2025.
In total, Telix has guided for FY 2025 revenue in the range of A$1.18 billion to A$1.23 billion, a notable increase from FY 2024.
Catalysts ahead
Telix remains aggressive in expanding its clinical pipeline, and Bell Potter sees multiple short-term catalysts that could drive further upside for this ASX 200 share. The company is pushing ahead with pivotal studies for TLX250 (a renal cancer treatment) and TLX101 (a therapy for glioma).
There's also significant anticipation around a potential FDA approval for Zircaix, a ccRCC imaging agent, with an announcement expected within weeks. Meanwhile, the company's ProstACT global study for prostate cancer is expected to deliver interim data in the first half of FY 2025.
Time to buy
Given these developments, Bell Potter has made wholesale changes to its earnings forecasts for Telix. This has led to the broker upgrading its shares to a buy rating and lifting its price target on them to $36.00 (from $21.60).
Based on its current share price of $30.12, this implies potential upside of almost 20% for investors over the next 12 months.
Commenting on the company, it said:
TLX remains laser-focused on accelerating its extensive clinical pipeline to market and will continue to spend aggressively through CY27 in order to achieve this goal.
Numerous changes to earnings following completion of RLS acquisition and devaluation of A$. PT is amended to $36.00 (from $21.60) and recommendation is upgraded to buy largely driven by short term catalysts for new product approvals.
