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On Monday, Morgan Stanley (NYSE:MS) adjusted its outlook on Akero Therapeutics (NASDAQ:AKRO), lowering the price target from $90.00 to $84.00. Despite this change, the firm maintained an Overweight rating on the company’s stock. Currently trading at $41.88, with analyst targets ranging from $60 to $109, the stock appears to be trading near its InvestingPro Fair Value. The revision follows a recent analysis of Akero’s first-quarter financials for 2025 and market trends.
The firm’s analysts have updated their financial model for Akero, incorporating the latest quarterly results and adjusting expectations for the company’s EFX product. The adjustments include a conservative shift in the projected timeline for the U.S. launch of EFX treatments for F4 patients, now anticipated three years later than previously expected, pending clinical outcomes data. With a beta of -0.13, the stock typically moves independently of broader market trends, as noted in InvestingPro’s analysis.
Morgan Stanley’s analysts noted that while they have slightly reduced their initial sales estimates for EFX, they have increased their sales forecasts for the outer years. This change reflects a more cautious stance on the timing of the product’s market entry. However, they also pointed out that an earlier approval based on biopsy results could potentially lead to an upside in their price target.
Akero Therapeutics reported that it ended the first quarter of 2025 with $1,128 million in cash and equivalents. The company’s robust financial health is reflected in its impressive current ratio of 19.38, indicating strong liquidity. According to Morgan Stanley, this strong financial position should provide Akero with a cash runway that extends into the year 2028, supporting the company’s operations for the foreseeable future. The adjustment in the price target to $84 from $90 is a reflection of the updated model and market conditions as assessed by Morgan Stanley. For more detailed financial metrics and additional insights, including 8 more exclusive ProTips, visit InvestingPro.
In other recent news, Akero Therapeutics announced promising results from its Phase 2b SYMMETRY trial, which evaluated the drug efruxifermin (EFX) for liver fibrosis improvement in patients with cirrhosis due to metabolic dysfunction-associated steatohepatitis (MASH). The trial showed that at week 96, 29% of participants in the EFX 50mg group and 21% in the EFX 28mg group demonstrated fibrosis improvement without worsening of MASH, compared to 11% in the placebo group. Akero is advancing with its Phase 3 SYNCHRONY program, aiming to address a condition that currently lacks approved treatments. In related developments, Clear Street initiated coverage on Akero Therapeutics with a Buy rating and a price target of $49, citing EFX’s significant potential in treating NASH, particularly in the cirrhosis market. H.C. Wainwright also raised Akero’s stock target to $75, maintaining a Buy rating, based on a revised valuation model and EFX’s potential market exclusivity through 2037. The firm’s analysis includes a risk-adjusted value for EFX, assuming an 80% probability of success and potential peak revenues of $5.8 billion by 2037. Both firms emphasize EFX’s competitive positioning and potential as a leading treatment option in the NASH market.
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