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On Tuesday, Deutsche Bank (ETR:DBKGn) initiated coverage of Sarepta Therapeutics (NASDAQ:SRPT), assigning a Hold rating to the biopharmaceutical company’s stock with a price target of $136.00. Deutsche Bank’s analysis centers on the commercial performance of Sarepta’s drug Elevidys, which is currently a key factor influencing the company’s stock value.
According to Deutsche Bank, while Sarepta’s management has successfully launched Elevidys, the coming quarters are expected to be critical for the drug’s continued success. The firm notes that although there is a strong optimistic sentiment regarding Elevidys’ market introduction, there are concerns about potential challenges. These include the adoption rate among non-ambulatory patients and the transition to suspension manufacturing, which may pose risks not fully accounted for by the market. InvestingPro analysis indicates the company maintains strong liquidity with a current ratio of 3.84, providing financial flexibility during this critical phase.
The one-time gene therapy Elevidys is anticipated to reach its peak sales in the years 2027-28. Post-peak, Deutsche Bank suggests that Sarepta’s other product lines, such as PMO and LGMD, may not be sufficient to sustain a positive revenue trend. The recent licensing agreement with ARWR to expand Sarepta’s pipeline is acknowledged, yet the bank indicates that these new assets will require time for clinical validation.
Deutsche Bank’s valuation model implies that Sarepta shares are currently trading at a price that reflects their fair value, especially after the discontinuation of the SRP-5051 program has been taken into account. Trading at a P/E ratio of 90.21, the stock shows a premium valuation, though InvestingPro analysis suggests it’s fairly valued based on their proprietary Fair Value model. The firm’s initiation of coverage with a Hold rating and a $136 price target reflects a cautious approach to the company’s stock amid the various factors at play. For deeper insights into Sarepta’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Sarepta Therapeutics has been the subject of several analyst notes following the release of significant trial data and financial results. BMO Capital Markets, Morgan Stanley (NYSE:MS), and Mizuho (NYSE:MFG) Securities all maintained positive outlooks on Sarepta, with price targets of $200 and $195 respectively, following the release of positive trial data for the company’s gene therapy product, Elevidys. The trial data showed significant improvements in functional endpoints, and the analysts believe this will support Elevidys’ market penetration and regulatory approval processes.
On the other hand, H.C. Wainwright reiterated a Sell rating on Sarepta, despite the company’s reported 112% quarter-over-quarter growth in Elevidys revenue. The analyst expressed concerns about the long-term market penetration of Elevidys among older and non-ambulatory patients.
Meanwhile, Piper Sandler reaffirmed its Overweight rating on Sarepta and maintained a price target of $182. The firm cited Sarepta’s full-year 2024 total net product revenue, which reached $1.79 billion, a 56% year-over-year growth. The firm also highlighted significant developments in Sarepta’s pipeline, particularly concerning its limb-girdle muscular dystrophy (LGMD) portfolio. All these are recent developments that investors should take into account.
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