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Wednesday, Craig-Hallum initiated coverage on Myriad Genetics (NASDAQ:MYGN) with an optimistic outlook, assigning a Buy rating to the stock along with a price target of $29.00. The firm’s analysis suggests that the current market valuation of Myriad Genetics does not fully reflect the company’s potential, noting that the stock is trading near a 10-year low. InvestingPro data confirms this bearish sentiment, showing the stock trading at $12.62, near its 52-week low of $12.04, after declining 55% over the past six months. Despite recent challenges, three analysts have revised their earnings expectations upward for the upcoming period.
The research firm believes that the market has overly discounted Myriad Genetics’ shares, implying that very little will improve and a lot could deteriorate. Contrary to this sentiment, Craig-Hallum sees the situation from a different perspective. The analysts are confident in the company’s preliminary guidance for the year 2025, considering it not only achievable but possibly even on the conservative side.
According to Craig-Hallum, the stock’s current trade value at just 1.2 times the midpoint of the preliminary 2025 guidance range indicates a lack of market confidence in the company’s forecasted numbers. The firm suggests that if Myriad Genetics manages to deliver results that align with their guidance, it is likely to result in an expansion of the stock’s multiple.
The coverage initiation and the positive rating come at a time when Myriad Genetics’ stock appears undervalued to Craig-Hallum, presenting what they see as an attractive risk-reward scenario for investors. The firm’s stance is based on the belief that the company’s stock price could see significant appreciation merely by meeting its projected financial targets. With the next earnings report due on March 4, investors can access detailed valuation metrics and eight additional ProTips through InvestingPro’s comprehensive analysis platform.
In other recent news, Myriad Genetics has secured two new patents enhancing its molecular residual disease (MRD) assay capabilities. The patents cover automated MRD analysis methods and patient journey aspects of MRD. UBS has assigned a Neutral rating to Myriad Genetics shares, citing concerns regarding GeneSight reimbursement and predicting a stabilization of the company’s revenue growth at a high single-digit rate beyond 2025. Leerink Partners has downgraded Myriad Genetics stock to Market Perform and reduced its 2025 growth estimate to 2.5%, citing challenges related to reimbursement and increasing competition. The company has also reached a settlement in a series of shareholder derivative lawsuits, agreeing to implement specified corporate governance reforms and pay up to $950,000 in attorneys’ fees and expenses. Lastly, Scotiabank (TSX:BNS) has reduced its price target on Myriad Genetics shares in response to a policy change by UnitedHealth Group (NYSE:UNH) that will stop covering pharmacogenomics (PGx) panel testing, including Myriad Genetics’ GeneSight, starting January 1, 2025. These are among the recent developments concerning Myriad Genetics.
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