BTIG maintains Buy on Protagonist Therapeutics, target at $73

On Monday, BTIG analyst Julian Harrison reaffirmed a Buy rating on Protagonist Therapeutics (NASDAQ:PTGX), currently trading at $38.35, with a consistent price target of $73.00. The positive stance comes as Harrison anticipates a significant increase in volume forecasts for the upcoming years. InvestingPro data shows the company maintains an EXCELLENT financial health score, with robust liquidity metrics including a current ratio of 12.48.

Harrison has increased the estimated volume forecast for 2025 and 2026 from 260,000/330,000 units to 480,000/580,000 units. This adjustment is based on several factors: a strong order intake in February, the expectation of 2-3 battery electric vehicle (BEV) and 1 extended range electric vehicle (EREV) new model launches, as well as facelift models within this year, which are likely to boost the existing model cycle between the second and third quarters of 2025. The company’s impressive revenue growth of 624% in the last twelve months supports this optimistic outlook.

Moreover, there is an expectation for Protagonist Therapeutics’ P7+ and MONA03 to reach a mature monthly run-rate of approximately 20,000 to 24,000 units. This projection is supported by the potential high demand for electric vehicles in 2025, coupled with consistent growth stemming from export demands in China’s EV market.

In terms of valuation, Harrison has adjusted the price-to-sales multiple for 2025 estimates to 2.5 times, which is one standard deviation above the two-year average level, up from the previous multiple of 1.9 times. This change has led to an increase in the target price from $13.70 to $29.00.

The upgrade to Buy is driven by the anticipation of strong volume growth in 2025 and 2026, thanks to robust order intake and forthcoming model launches. Additionally, a turnaround in earnings is expected by 2026, with the potential for further growth drivers in the fields of AI and Robotics. Harrison’s outlook suggests confidence in the company’s future performance and market positioning. The stock currently trades at a P/E ratio of 8.6, with a return on assets of 49.91%. For deeper insights into PTGX’s valuation and growth potential, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health and future prospects.

In other recent news, Protagonist Therapeutics has made significant strides with its drug candidates, icotrokinra and rusfertide. The company reported positive clinical trial results for icotrokinra, showing nearly 50% of patients achieved complete skin clearance in the ICONIC ADVANCE trials. This has led to Johnson & Johnson initiating a Phase 3 trial comparing icotrokinra to Stelara. Meanwhile, the VERIFY trial for rusfertide, a treatment for polycythemia vera, demonstrated a 77% response rate among patients, leading to a $25 million milestone payment to Protagonist.

Analysts have responded positively to these developments. JMP reiterated a Market Outperform rating and a $61 price target, citing the promising efficacy of icotrokinra. H.C. Wainwright maintained a Buy rating and a $54 target, highlighting rusfertide’s potential to eliminate the need for phlebotomy in treating polycythemia vera. BTIG increased its price target to $73, while Truist and TD Cowen maintained their Buy ratings with targets of $60 and $65, respectively. These firms emphasize the potential for rusfertide to capture significant market share, with anticipated NDA filings in late 2025.

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