Canaccord maintains $180 target on Natera stock post-NCCN update

On Monday, Canaccord Genuity maintained a Buy rating on Natera (NASDAQ:NTRA) shares, with a price target of $180. Trading at $169.27, the $22.35 billion market cap company enjoys strong analyst support, with a consensus recommendation of 1.47 (Strong Buy) and price targets ranging from $37 to $210. The firm’s analysts highlighted the significance of recent updates by the National Comprehensive Cancer Network (NCCN) regarding circulating tumor DNA (ctDNA) molecular residual disease (MRD) testing in their Clinical Practice Guidelines in Oncology for colon cancer, rectal cancer, and merkel cell carcinoma (MCC).According to InvestingPro data, Natera has delivered an impressive 147.81% return over the past year, with multiple analysts revising earnings estimates upward for the upcoming period.

According to the NCCN, ctDNA is now recognized as a high-risk factor for recurrence in the adjuvant setting. This marks the first time ctDNA’s prognostic value has been acknowledged in the guidelines, although the NCCN remains cautious about its use for surveillance purposes.

Canaccord Genuity’s analysts noted that the updated guidelines do not yet reflect recent data demonstrating the predictive nature of Natera’s Signatera in the adjuvant setting. However, they view the NCCN’s inclusion as a pivotal step for Signatera’s guideline acceptance, with the expectation that it may take additional years for ctDNA to gain broader acceptance for surveillance monitoring.

The analysts’ reiteration of the Buy rating and price target suggests confidence in Natera’s potential, despite the cautious stance of the NCCN on the broader application of ctDNA for surveillance at this time.

Natera’s Signatera test, which is designed to detect molecular residual disease, is at the forefront of personalized cancer monitoring. The NCCN’s recent update could serve as an important endorsement for the test, potentially leading to increased adoption in clinical settings.

The market will continue to observe Natera’s progress as the company seeks to expand the clinical use and acceptance of Signatera, along with the evolving landscape of cancer monitoring guidelines. The company’s robust revenue growth of 54.94% in the last twelve months and strong financial health score from InvestingPro suggest solid execution of its growth strategy. While currently trading above its Fair Value estimate, investors can access detailed valuation analysis and 12 additional ProTips through an InvestingPro subscription, which includes comprehensive research reports covering over 1,400 US stocks.

In other recent news, Natera has been in the spotlight following several key developments. The National Comprehensive Cancer Network updated its colon cancer treatment guidelines, acknowledging the prognostic value of circulating tumor DNA minimal residual disease tests like Natera’s Signatera, as reported by Raymond (NSE:RYMD) James. Meanwhile, Canaccord Genuity maintained a Buy rating for Natera, following the release of positive study results related to the Signatera test.

In addition, Barclays (LON:BARC) initiated coverage on Natera shares with an Overweight rating, citing the company’s expansion into new markets and success in the MRD space. TD Cowen also reiterated its Buy rating on Natera shares, expressing confidence in the company’s future performance despite potential new competition in the MRD market.

On the legal front, Natera expanded its patent infringement litigation against NeoGenomics (NASDAQ:NEO), involving the RaDaR assay, a test for molecular residual disease. This follows a series of court decisions regarding NeoGenomics’ earlier version of the RaDaR test.

These recent developments highlight Natera’s ongoing progress in the field of genetic testing and diagnostics.

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