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On Monday, H.C. Wainwright analyst Ed Arce updated the firm’s stance on Akero Therapeutics (NASDAQ:AKRO), increasing the price target to $75 from the previous $72 while maintaining a Buy rating on the stock. The adjustment comes as the analyst applies a revised net present value (rNPV) model to estimate the value of Akero’s shares. According to InvestingPro data, analyst targets for AKRO currently range from $60 to $109, with the stock showing remarkable momentum, having gained 89% over the past six months.
Arce’s valuation of Akero Therapeutics centers on the potential of EFX, the company’s leading drug candidate for treating patients with non-alcoholic steatohepatitis (NASH) with F2/F3 fibrosis. The analyst estimates a risk-adjusted per-share value of EFX at approximately $50.60, which assumes an 80% probability of success and anticipates global peak revenues of $5.8 billion by the year 2037. The company, currently valued at $3.74 billion, maintains a strong financial position with a current ratio of 19.38, indicating robust liquidity to support its development programs. InvestingPro subscribers can access 8 additional key insights about AKRO’s financial health and growth prospects.
The evaluation also factors in the preliminary risk-adjusted value of EFX for patients with well-compensated cirrhotic (F4) NASH, based on the 96-week SYMMETRY study results, which Arce values at $19.50 per share with a 65% probability of success. Additionally, the analyst includes an extra $4.92 per share for "excess cash" projected beyond a two-year timeframe.
Arce’s price target reflects a forecast of market exclusivity for Akero’s EFX through 2037, with a conservative approach that assumes no terminal value after this period. The analyst also outlines key risks that could impact the rating and price target, including potential trial failures, safety or tolerability issues, significant delays to projected timelines, or challenges in securing adequate funding for operations. These factors represent the primary uncertainties that might influence the company’s future performance and stock valuation.
In other recent news, Akero Therapeutics has seen a series of positive developments, particularly in relation to its treatment for non-alcoholic steatohepatitis (NASH). Morgan Stanley (NYSE:MS) has significantly raised its price target for the company to $96, citing impressive outcomes from the SYMMETRY study and an increased probability of success for the treatment in F4 NASH patients. Citi analysts also boosted their price target to $80, following promising 96-week data for Akero’s therapeutic candidate, efruxifermin (EFX), which demonstrated significant fibrosis improvement.
Canaccord Genuity adjusted its price target to $73, maintaining a Buy rating, after the release of positive data showing robust fibrosis improvement, which could set a new benchmark for F4 biopsy-driven studies. Jefferies raised its price target to $75, emphasizing the company’s potential in the NASH market and its attractiveness as a potential acquisition target. H.C. Wainwright increased its target to $72, based on a risk-adjusted valuation model, reflecting confidence in Akero’s market potential for its treatment candidate.
These updates from various analyst firms underscore a generally positive outlook for Akero Therapeutics, with expectations of significant market growth in NASH treatments. The recent trial results have reinforced the potential for Akero’s EFX as a breakthrough treatment, attracting strategic interest and anticipation of regulatory milestones. As Akero Therapeutics progresses towards commercialization, the continued analyst optimism reflects the strong data supporting its therapeutic developments.
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