Bank of America Securities is holding firm on its bullish stance for Jazz Pharmaceuticals (NASDAQ:JAZZ), reiterating a Buy rating and maintaining its $213 price target, despite the stock’s nearly 30% decline since late March.
The sharp drop in Jazz’s share price appears tied to investor concerns about potential U.S. tariffs on pharmaceutical imports, particularly drugs manufactured in Ireland. At the center of this concern is Jazz’s top-selling narcolepsy treatment, Xywav, which generates $1.7 billion in annual revenue and is produced in Ireland.
However, BofA believes the selloff significantly overshoots even the most pessimistic tariff scenarios. The firm points out that Jazz has already confirmed the ability to mitigate short-term disruptions. The company holds substantial U.S. inventory of Xywav, which has a long shelf life, and production is already supported by a U.S.-based contract manufacturer. This domestic facility would not require additional FDA or DEA approvals.
Key variables remain—such as regulatory restrictions around increasing domestic output of a DEA-scheduled medication—but BofA sees low risk of bottlenecks given the drug’s niche market of fewer than 20,000 patients.
If tariffs are imposed at a high rate, Jazz could feasibly pivot to U.S. production and use stockpiled inventory as a buffer. Such a shift could slightly raise the company’s tax burden due to higher domestic profits, but BofA views that as a manageable and even favorable tradeoff under the circumstances.
Overall, the firm argues that the stock’s recent weakness creates an attractive entry point, with Jazz’s fundamentals and risk management positioning it well for recovery.