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Investing.com - RBC Capital has lowered its price target on Exelixis (NASDAQ:EXEL) to $45.00 from $50.00 while maintaining a Sector Perform rating following the company’s second-quarter earnings report. According to InvestingPro analysis, the stock appears undervalued at current levels, with the company maintaining a "GREAT" financial health score and an impressive 92% return over the past year.
The biopharmaceutical company missed revenue expectations in its 2Q25 results, which RBC analyst Leonid Timashev suggests may contribute to near-term weakness in the stock price.
A key factor in RBC’s price target reduction was Exelixis’s decision to discontinue development of its zanza drug in head and neck squamous cell carcinoma (HNSCC), potentially limiting the drug’s ability to support revenues after Cabometyx loses exclusivity in 2030.
Despite the disappointing quarterly performance, RBC noted that uptake remained strong for Cabometyx in neuroendocrine tumors (NETs), which could drive continued growth supporting full-year 2025 financial results.
RBC believes the current share price fairly values Cabometyx’s remaining growth potential, zanza’s lifecycle, and the upcoming STELLAR-303 metastatic colorectal cancer data, expecting the stock to trade within its current range until there is further clarity on product lifecycle development.
In other recent news, Exelixis reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.75, which exceeded analysts’ expectations of $0.64. The company’s revenue for the quarter reached $568 million, slightly below the anticipated $578.46 million. Truist Securities responded by lowering its price target for Exelixis to $49 from $56, citing mixed results, particularly the Cabometyx sales of $520 million, which fell short of Wall Street’s $530 million estimate. Despite the revenue miss, JMP Securities maintained its Market Outperform rating and a $50 price target, attributing the sales shortfall to new pricing dynamics but noting strong volume growth of 18% year-over-year. Stifel, on the other hand, raised its price target for Exelixis to $41 from $38, reflecting increased success probabilities for the zanza treatment in metastatic colorectal cancer. These developments highlight a mixed but optimistic outlook for Exelixis, with analysts focusing on strategic advancements and potential growth.
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