U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
Investing.com - UBS maintained its Neutral rating and $38.00 price target on Exelixis (NASDAQ:EXEL) Monday, despite the stock’s 55% rise since October 2024. According to InvestingPro data, the company has delivered an impressive 81.85% return over the past year, while maintaining a perfect Piotroski Score of 9, indicating strong financial fundamentals.
The research firm expressed caution about Exelixis’s pipeline diversification efforts, noting that the approximately $4 billion market capitalization increase since October suggests the market is pricing in about $1.3-$1.4 billion in peak sales for the company’s zanzalintinib drug. The company’s strong financial position is reflected in its healthy current ratio of 3.5 and robust revenue growth of 24.49% over the last twelve months.
UBS described Exelixis as a "short pain trade" stock in the first half of 2025, continuing to rise due to what it termed "de-grossing" in the market.
The firm believes Exelixis’s stock trajectory now depends on details from the upcoming STELLAR-303 trial results for zanzalintinib, which could potentially establish a pipeline diversification narrative for the company.
UBS cautioned that without successful pipeline transition, Exelixis’s valuation could "continue to erode as a ’cliff stock,’" while adding that the company’s aggressive share buyback program might merely maintain equity value rather than create it in the long run.
In other recent news, Exelixis announced positive results from its STELLAR-303 trial, a phase 3 study that showed a statistically significant improvement in overall survival for metastatic colorectal cancer patients treated with a combination of zanzalintinib and atezolizumab. This pivotal trial success led Truist Securities to raise its price target for Exelixis to $55, maintaining a Buy rating, while William Blair continued its outperform rating, highlighting the commercial potential of the drug with estimated peak sales of $875 million in the U.S. Stifel, however, maintained its Hold rating with a price target of $38, despite the unexpected positive trial results. In addition, Exelixis’ partner Ipsen (EPA:IPN) received a positive opinion from the European Medicine Agency’s Committee for Medicinal Products for Human Use for CABOMETYX, used in treating certain neuroendocrine tumors. This recommendation is based on the Phase 3 CABINET trial, which showed superior efficacy of cabozantinib over placebo. H.C. Wainwright reiterated its Buy rating on Exelixis with a $47 price target, anticipating a favorable decision from the European Commission. These developments mark significant progress in Exelixis’ drug development programs and potential market opportunities.
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