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Investing.com - Mizuho (NYSE:MFG) has reiterated an Outperform rating and $40.00 price target on Sarepta Therapeutics (NASDAQ:SRPT) stock, citing reduced concerns about potential FDA market withdrawal of its Elevidys treatment. The stock, currently trading at $18.38, has fallen 87% over the past year, though InvestingPro analysis suggests the company is currently undervalued.
The research firm noted that Sarepta’s stock has been under pressure due to worries about possible FDA action against Elevidys and the company’s ability to repay its 2027 debt obligations. Mizuho believes the latest update should help alleviate these concerns.
Management’s indication that material issues with the ambulant portion of the Elevidys label are likely resolved through an FDA-requested black box warning supports Mizuho’s view that the regulator is unlikely to remove the drug from the market.
Mizuho’s financial models suggest Sarepta’s restructuring program and conservative revenue projections ($500M in Elevidys sales and $900M in PMO sales for 2026-2027) should enable the company to repay its 2027 convertible note while maintaining access to its $600M revolver.
The firm also highlighted Sarepta’s second-quarter 2025 product sales of $513M exceeded expectations, driven primarily by Elevidys sales of $282M, compared to Mizuho’s estimate of $245M. This performance contributes to the company’s impressive 59% year-over-year revenue growth. Get deeper insights into Sarepta’s financial health and growth prospects with a comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Sarepta Therapeutics has announced a strategic restructuring plan that includes cutting approximately 500 jobs, representing 36% of its workforce. This move is expected to save the company around $400 million annually. Sarepta reported preliminary second-quarter financial results with total net product revenue of $513 million, including $282 million from its gene therapy ELEVIDYS. The company also holds approximately $850 million in cash and investments. The U.S. Food and Drug Administration has requested a black box warning for ELEVIDYS due to acute liver injury and failure concerns, and Sarepta has agreed to comply. Additionally, the FDA is investigating reports of two deaths linked to ELEVIDYS among non-ambulatory patients. In light of these developments, JPMorgan has lowered its price target for Sarepta from $30 to $28, citing a valuation disconnect. Piper Sandler maintained a Neutral rating and a $36 price target on the stock amidst these safety concerns. These recent developments highlight Sarepta’s strategic and operational shifts as it focuses on its siRNA platform and addresses safety issues with its existing treatments.
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