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On Monday, Morgan Stanley (NYSE:MS) exhibited confidence in Akero Therapeutics (NASDAQ:AKRO) by significantly raising the company's price target, while retaining its positive Overweight rating. The stock, currently trading at $51.72, shows strong analyst support with a consensus "Strong Buy" rating according to InvestingPro data. Following impressive outcomes from the SYMMETRY study, the firm's analysts have adjusted their expectations, leading to an increase in the probability of success for the company's treatment in F4 NASH patients to 80%, up from the previous 55%. This optimistic revision is tempered by a revised launch timeline, now anticipated in early 2028 for F2-F3 patients and 2029 for F4, which is a delay from the initially expected 2026.
The revised price target by Morgan Stanley stands at $96.00, a substantial leap from the prior target of $46.00. This adjustment is based on an updated forecast for Akero Therapeutics' peak, risk-adjusted sales which are now projected to reach $3.6 billion, an increase from the former estimate of $2.0 billion. InvestingPro analysis indicates the company maintains a strong financial position with a current ratio of 17.25, suggesting robust liquidity to fund its development pipeline. The adjustment in sales estimates and launch timeline has culminated in the doubling of the price target.
The enhanced price target is also reflected in the updated scenario analysis ranges provided by Morgan Stanley. The Bull case scenario for Akero Therapeutics' stock has escalated to $276, the Base case to $96, and the Bear case to $28. These figures have all seen substantial increases from their previous estimates of $118, $46, and $6, respectively.
The SYMMETRY study has been a pivotal factor in Morgan Stanley's reassessment of Akero Therapeutics' stock potential. The study's robust results have provided a stronger foundation for the anticipated success of the company's treatment for NASH patients. This has played a crucial role in the firm's decision to raise the price target.
The market's response to Morgan Stanley's updated outlook for Akero Therapeutics will be closely monitored by investors as the company progresses towards the commercial launch of its NASH treatment in the coming years. With a beta of -0.2, InvestingPro data shows the stock typically moves in the opposite direction of the market, potentially offering portfolio diversification benefits. InvestingPro subscribers have access to over 30 additional financial metrics and insights about Akero Therapeutics' future prospects.
In other recent news, Akero Therapeutics has made significant strides in the treatment of nonalcoholic steatohepatitis (NASH). The company's Phase IIB study results indicated a robust and statistically significant fibrosis benefit in both the completers analysis and the intent-to-treat population, sparking market optimism. Jefferies and H.C. Wainwright have maintained their Buy ratings on Akero's stock, with Jefferies setting a price target of $50.00. The positive outcomes from the study have increased confidence in the potential success of the upcoming Phase III trials, with Jefferies estimating a 75% probability of success.
In addition, Akero's Phase 2b SYMMETRY study demonstrated a significant reversal in fibrosis for patients treated with the company's leading drug candidate, efruxifermin (EFX). Citi initiated coverage on Akero with a positive outlook, assigning a Buy rating based on the potential of efruxifermin.
Meanwhile, Keros Therapeutics has voluntarily paused dosing in certain arms of its Phase 2 TROPOS Trial due to unexpected cases of pericardial effusion among participants. The company is working diligently to understand these findings and is collaborating with regulatory authorities to swiftly resolve the issue.
These are the latest developments in the ongoing efforts by these companies to advance treatments in their respective fields.
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