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On Monday, Exelixis (NASDAQ:EXEL) shares, with a market capitalization of $9.2 billion, received an optimistic update from Morgan Stanley (NYSE:MS), as the firm's analyst Sean Laaman upgraded the biopharmaceutical company's stock rating from Equalweight to Overweight. Accompanying the rating upgrade, Morgan Stanley also raised the price target for Exelixis stock to $40.00, a notable increase from the previous target of $30.00. According to InvestingPro data, the stock has shown strong momentum with a 38% gain over the past six months, despite a recent 10% pullback last week.
The upgrade was prompted by several factors, including an anticipated rise in revenue from Cabometyx due to its application in emerging indications such as neuroendocrine tumors (NET). Morgan Stanley's analysts expect that the revenue from these new applications has not been fully recognized in the company's 2025 guidance. InvestingPro data shows impressive revenue growth of 17.3% over the last twelve months, with analysts forecasting 18% growth for the upcoming year.
Furthermore, Morgan Stanley has incorporated revenue projections from Zanzalintinib, Exelixis's cancer treatment, into their model, anticipating contributions starting in late 2026. The analysts believe that the market has underestimated the potential of Zanzalintinib, and their analysis suggests a larger opportunity than what is currently reflected in Street estimates.
The firm's confidence in the upgraded rating and price target is also supported by Exelixis's strong balance sheet, which they believe provides a solid foundation for the company's growth and development.
Exelixis, listed on the NASDAQ under the ticker EXEL, is a company focused on the discovery, development, and commercialization of new medicines for the treatment of cancer. With the updated rating and price target from Morgan Stanley, the company's stock outlook appears more favorable as it continues to expand its treatment portfolio and explore new indications for its existing products.
In other recent news, Exelixis has experienced significant activity in earnings, revenue, and analyst evaluations. The biopharmaceutical company reported preliminary fourth-quarter sales from its Cabo franchise at approximately $509 million, contributing to full-year product sales around $1.805 billion, marking an 11% year-over-year growth. For the fiscal year 2025, the company has projected net product sales in the range of $1.95 to $2.05 billion.
Several financial firms have updated their outlooks on Exelixis. JMP Securities maintained a Market Outperform rating and a price target of $41.00 on Exelixis, highlighting the promising efficacy of zanzalintinib, a key asset for the company's future growth. Oppenheimer analysts, however, downgraded Exelixis stock from Outperform to Perform, adjusting the price target to $33.00 from the previous $41.00.
Exelixis is currently conducting six pivotal trials with zanzalintinib, targeting various cancers. Outcomes from the first pivotal trials are anticipated in the second half of 2025 and into 2026. These are recent developments that have been shaping the financial landscape for Exelixis.
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