Street Calls of the Week
Investing.com - UBS has lowered its price target on Exelixis (NASDAQ:EXEL) to $35.00 from $38.00 while maintaining a Neutral rating on the stock. The company, currently valued at $10.9 billion, has demonstrated strong performance with a 51.8% return over the past year. According to InvestingPro analysis, Exelixis appears undervalued at current levels.
The firm cited concerns about the upcoming Phase 3 STELLAR data for Exelixis’ Zanza pipeline program, which is expected to be presented at the European Society for Medical Oncology (ESMO) conference, with late-breaking abstract titles to be released on September 20. Despite these concerns, InvestingPro data shows the company maintains excellent financial health with strong profitability metrics and operates with moderate debt levels.
UBS believes the data is likely to disappoint regarding Zanza’s potential, which could drive "meaningful downside" to the stock based on the firm’s survey of 20 colorectal cancer oncologists.
The analyst noted that Exelixis’ current valuation heavily depends on the Zanza pipeline program as its Cabometyx product faces loss of exclusivity (LOE) in 2030. The discontinuation of Zanza’s head and neck cancer indication has already triggered a roughly 20% sell-off in the stock.
UBS reduced its multiple from 4.5x to 4.0x EV/2030 estimated sales, citing long-term growth concerns due to Cabometyx going generic in 2030, and lowered its 2031 and beyond sales estimates for Cabometyx by approximately 64% to account for loss of exclusivity.
In other recent news, Exelixis has been the focus of multiple analyst assessments and company announcements. The company missed revenue expectations in its second-quarter earnings for 2025, prompting RBC Capital to lower its price target from $50.00 to $45.00, while maintaining a Sector Perform rating. Similarly, H.C. Wainwright reduced its price target from $53.00 to $46.00 following the company’s decision not to proceed with the Phase 3 portion of the STELLAR-305 trial, yet maintained a Buy rating.
Goldman Sachs initiated coverage on Exelixis with a Buy rating and a $47.00 price target, citing the potential of zanzalintinib to offset future revenue losses. Barclays also began coverage, assigning an Equalweight rating and a $40.00 price target, with expectations of mid-single-digit growth for cabozantinib until its patent expires in 2029. In leadership news, Exelixis announced the appointment of Dana T. Aftab, Ph.D., as Executive Vice President, Research and Development. Concurrently, Amy C. Peterson, M.D., concluded her role as Executive Vice President, Product Development and Medical Affairs. These developments highlight ongoing strategic shifts and analyst perspectives on Exelixis’s growth and revenue potential.
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