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On Monday, Jones Trading initiated coverage on Mural Oncology (NASDAQ:MURA) with a Buy rating and a price target of $16.00. Currently trading at $3.95, the stock sits well below the broader analyst target range of $13-$18, with InvestingPro analysis suggesting the company is currently undervalued. The firm's optimistic stance is based on the expectation that positive interim Phase 3 data, anticipated in the first half of 2025, will positively influence investor sentiment towards MURA, especially regarding its IL-2 drug development program.
The analyst from Jones Trading highlighted that investors have been wary of IL-2 therapies following the failures of similar programs from Nektar/Bristol Myers Squibb and Synthorx/Sanofi in 2022. However, the analyst believes that Mural Oncology's nemva has a mechanism of action supported by prior Phase 1/2 data, which addresses the limitations seen in previous IL-2 programs.
Mural Oncology's financial position appears robust, with approximately $175 million in cash reserves reported at the end of the third quarter of 2024. The company is expected to have sufficient funds to continue operations into the first quarter of 2026. InvestingPro data confirms this strength, showing a healthy current ratio of 7.38 and more cash than debt on the balance sheet. However, InvestingPro also flags that the company is quickly burning through its cash reserves - one of several key insights available to subscribers. With two major catalysts projected for the first half of 2025, Jones Trading sees a favorable risk/reward scenario for MURA's stock.
Jones Trading's coverage and the $16 price target reflect a confidence in Mural Oncology's potential to overcome the historical challenges associated with IL-2 drug development. The firm's analysis suggests that upcoming developments could significantly reshape the market's view of MURA and its prospects. With a current market capitalization of just $67.47 million, InvestingPro subscribers can access additional metrics and insights to better evaluate this emerging biotech opportunity.
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