Narrow-Moat Genmab Continues to Benefit From Positive Foreign Exchange Impact; FVE to DKK 2,650

Narrow-moat Genmab is continuing to benefit from the strong U.S. dollar, which is creating a positive foreign exchange rate impact on its royalty revenue, in addition to robust Darzalex sales. Management has revised its USD/DKK exchange rate guidance to 7.2 for the year versus previous guidance of 6.8. We’ve updated our forecasts to account for the increased foreign exchange rate guidance and continued healthy performance of Darzalex, and we’ve raised our fair value estimate to DKK 2,650 from DKK 2,490. We maintain our narrow moat rating, stable trend, and medium uncertainty rating. While we believe Genmab is well positioned to post strong sales with average revenue growth of 10% between 2023-31, we think the stock’s high valuation seems to expect even stronger potential. We view the current share price as overvalued, and Genmab shares are trading in 2-star territory.