Evercore ISI cuts Rocket Pharmaceuticals stock rating to in line

On Friday, Rocket Pharmaceuticals (NASDAQ:RCKT), currently trading at $2.47, faced a downgrade from Evercore ISI, moving from an Outperform rating to In Line, accompanied by a significant reduction in the price target to $5.00 from the previous $18.00. The decision by Evercore ISI follows a recent unfortunate event in Rocket Pharmaceuticals’ clinical program. According to InvestingPro data, the stock has declined over 58% in the past week alone, though analyst targets still range from $2 to $34.

The firm’s analysts cited the death of a patient in Rocket Pharmaceuticals’ Danon trial as the primary reason for the downgrade. The analysts expressed their perspective on the situation and the impact it has on the company’s outlook. According to Evercore ISI, there are three key questions to consider regarding Rocket Pharmaceuticals’ path forward. Despite recent challenges, the company maintains a strong balance sheet with more cash than debt and a healthy current ratio of 9.19, though InvestingPro analysis indicates the company is quickly burning through its cash reserves.

The downgrade and the revised price target reflect Evercore ISI’s reassessment of the company’s prospects after the recent trial incident. The analysts have also decided to remove Rocket Pharmaceuticals from the SMID (Small to Mid-Cap) Core List, indicating a shift in their investment outlook for the company. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, though the company’s overall financial health score remains weak at 1.54 out of 5.

Rocket Pharmaceuticals has not publicly responded to the downgrade at the time of reporting. The company’s stock performance in the upcoming trading sessions may be influenced by Evercore ISI’s updated stance and the recent clinical trial news.

Investors and market watchers will likely monitor Rocket Pharmaceuticals closely as the company navigates the repercussions of the trial event and Evercore ISI’s revised rating and price target. The healthcare sector often sees volatility in response to clinical trial outcomes and analyst ratings, making the situation with Rocket Pharmaceuticals one to watch.

In other recent news, Rocket Pharmaceuticals has faced multiple downgrades from prominent financial institutions following a clinical hold on its RP-A501 program for Danon disease. JPMorgan downgraded the company’s stock from Overweight to Neutral, reducing the price target to $7.00, citing concerns over the clinical hold due to a patient’s death. Similarly, Goldman Sachs downgraded the stock from Buy to Sell, slashing the price target to $2.00, and expressed doubts about the commercial viability of the RP-A501 program. Scotiabank (TSX:BNS) maintained a Sector Outperform rating but lowered its price target to $19.00, reflecting a reduced probability of success for the program. BofA Securities also adjusted its price target to $9.00 while maintaining a Buy rating, highlighting the potential for near-term volatility. Morgan Stanley (NYSE:MS) downgraded the stock from Overweight to Equalweight, with a new price target of $7.00, and adjusted the expected launch timeline for RP-A501 to 2028. These developments have raised questions about the future regulatory path and commercial prospects for Rocket Pharmaceuticals’ lead program. As the company navigates these challenges, investors will be keenly watching for updates on the trial’s status and any further regulatory decisions.

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