Craig-Hallum initiates Design Therapeutics stock with Buy rating

Investing.com - Craig-Hallum initiated coverage on Design Therapeutics Inc (NASDAQ:DSGN) with a Buy rating and a $15.00 price target on Wednesday, representing a potential 60% upside from the current price of $9.38.

The research firm sees Design Therapeutics as an "underappreciated GeneTAC platform name" with potential catalysts coming in the second half of 2026. With an overall financial health score rated as "GOOD" according to InvestingPro, the company holds more cash than debt on its balance sheet.

Design Therapeutics shares have risen 45% year-to-date, outperforming the XBI’s 32% gain, and currently reflect an enterprise value of approximately $300 million. The stock has shown remarkable momentum with a 123% price return over the last six months and is trading near its 52-week high of $9.85. InvestingPro data shows the stock has a relatively high Beta of 1.68, indicating more volatility than the broader market.

Craig-Hallum believes upcoming Friedreich’s ataxia (FA) and Fuchs readouts scheduled for the second half of 2026 could transform market perception of the company.

These clinical results could potentially shift investor sentiment from "show-me skepticism" to viewing Design Therapeutics as a "de-risked, multi-asset genetic-medicine story" that is not reflected in the current valuation, according to the research firm.

In other recent news, Design Therapeutics has garnered attention with several significant developments. The company received an upgrade from Leerink Partners, which elevated its stock rating from Market Perform to Outperform, citing progress with the reformulated Friedreich’s Ataxia treatment candidate, DT-216P2. This upgrade was accompanied by a doubled price target of $14.00, reflecting confidence in the company’s pipeline advancements. Similarly, RBC Capital upgraded Design Therapeutics from Sector Perform to Outperform, raising the price target to $13.00. RBC’s analyst Leonid Timashev highlighted an optimistic outlook for 2026, focusing on the new DT-216P2 formulation for Friedreich’s Ataxia.

In addition to analyst upgrades, Design Therapeutics announced regulatory clearance outside the US for DT-818, a small molecule targeting myotonic dystrophy type-1. The company plans to initiate a Phase 1 multiple-ascending dose trial in Australia in the first half of 2026. This trial will provide splicing data expected in 2027, marking a pivotal step in their clinical development efforts. These recent developments underscore the company’s strategic focus on advancing its therapeutic pipeline.

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