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On Monday, Mizuho (NYSE:MFG) analysts upgraded Amylyx Pharmaceuticals Inc. (NASDAQ:AMLX) stock rating from Neutral to Outperform, significantly increasing the price target from $3.00 to $7.00. The new target suggests approximately a 100% upside potential from the previous target. Currently trading at $3.43, AMLX sits above its 52-week low of $1.57 but well below its high of $7.27. The decision to upgrade the stock rating and price target follows Mizuho’s introduction of first-time projections for Amylyx’s avexitide in treating post-bariatric hypoglycemia (PBH), which is the company’s primary research and development focus. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis.
Analysts at Mizuho have also reintegrated model contributions from Amylyx’s AMX0035 for progressive supranuclear palsy (PSP) and Wolfram Syndrome (WS) into their valuation. Additionally, Mizuho has transitioned to a discounted cash flow (DCF)-based valuation methodology from the previously used projected cash per share-based approach. With a market capitalization of $304 million and a defensive beta of -0.53, InvestingPro analysis shows the company maintains a strong current ratio of 6.67, indicating solid short-term liquidity.
In their comprehensive note, Mizuho provided further details on the changes to their model. They highlighted the potential of avexitide in the treatment of PBH and emphasized the strategic focus and priority Amylyx has placed on this opportunity. The analysts’ commentary reflects a positive outlook on the company’s research and development pipeline, despite the company’s recent revenue decline of 77% in the last twelve months and an EBITDA of -$291 million.
Amylyx Pharmaceuticals Inc. is actively focusing on developing treatments for PBH, PSP, and WS, as indicated by the reinstatement of these programs in Mizuho’s financial model. The upgrade by Mizuho reflects confidence in the company’s pipeline and its valuation based on the new methodology.
The adjustment in the price target and stock rating by Mizuho signals a significant change in the firm’s expectations for Amylyx’s financial performance and market potential. The market will be watching closely how Amylyx’s stock responds to this upgraded outlook by Mizuho analysts.
In other recent news, Amylyx Pharmaceuticals announced that the U.S. Food and Drug Administration (FDA) has lifted the clinical hold on its Phase 1 trial for AMX0114, a potential treatment for amyotrophic lateral sclerosis (ALS). This decision allows the company to resume patient screening, enrollment, and dosing at trial sites across the United States. The clinical trial, named LUMINA, will also begin in Canada and is designed as a multicenter, randomized, placebo-controlled study. It will involve approximately 48 individuals with ALS and aims to assess the safety and biological activity of AMX0114. The trial will monitor changes in neurofilament light levels, a biomarker for ALS, and targets calpain-2, a protein linked to neurodegenerative processes. Amylyx plans to share early cohort data from the LUMINA trial within the year. The company is focused on developing treatments for diseases with significant unmet medical needs, with ongoing programs in various neurodegenerative and endocrine conditions.
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