Madrigal Pharmaceuticals stock rating upgraded by BofA on strong launch

Investing.com - BofA Securities upgraded Madrigal Pharmaceuticals (NASDAQ:MDGL) from Underperform to Neutral and raised its price target to $445.00 from $266.00 on Monday. The new target represents modest upside from the current trading price of $418.90 for the $9.3 billion market cap biotech company.

The upgrade follows Madrigal’s 47% share price increase since August, significantly outperforming the Nasdaq Biotechnology Index, which gained 11% during the same period. InvestingPro data shows the stock has delivered a 32.8% return over the past six months, with a beta of -1.03 indicating it typically moves in the opposite direction of the broader market.

BofA Securities cited the "solid launch" of Rezdiffra, Madrigal’s MASH (metabolic dysfunction-associated steatohepatitis) treatment, which has exceeded the firm’s initial cautious expectations.

Despite the upgrade, BofA Securities maintained a "nuanced view" on Madrigal, noting that structural issues remain, including recent FGF21 acquisitions that potentially weaken takeover prospects for the company.

The firm expects Rezdiffra’s near-term uptake to continue providing share price support, but warned that increasing competitive challenges may limit further upside potential.

In other recent news, Madrigal Pharmaceuticals has been the focus of several analyst updates, highlighting its strong market performance and future potential. Piper Sandler raised its price target for Madrigal Pharmaceuticals to $540 from $400, maintaining an Overweight rating due to the robust launch of REZDIFFRA and its intellectual property protection extending to 2044. Oppenheimer also increased its price target to $590 from $500, emphasizing the strategic importance of combination approaches in treating metabolic dysfunction-associated steatohepatitis (MASH), following Novo Nordisk’s acquisition plans for Akero Therapeutics. Truist Securities initiated coverage of Madrigal with a Buy rating and a $580 price target, pointing to the high demand for REZDIFFRA and its promising launch metrics. UBS reiterated its Buy rating with a $523 price target, noting the strong market outlook for Madrigal’s MASH treatment. Citizens maintained a Market Outperform rating with a $485 price target, citing positive third-quarter physician survey findings that show strong momentum for REZDIFFRA. These developments reflect a growing confidence in Madrigal Pharmaceuticals’ market position and future growth prospects.

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