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On Tuesday, Raymond (NSE:RYMD) James adjusted its price target for Mural Oncology (NASDAQ:MURA) shares, dropping it from $6.00 to $4.00, while maintaining an Outperform rating for the stock. Currently trading at $2.55 with a market cap of just $17.75 million, the stock’s RSI indicates oversold conditions. The revision follows Mural Oncology’s announcement earlier today about halting all clinical development of its drug candidate nemvaleukin and the company’s decision to significantly reduce its workforce. According to InvestingPro, the stock has declined over 68% year-to-date, with 12 more real-time signals available to subscribers.
Mural Oncology revealed intentions to cut approximately 90% of its staff, aiming to complete most of the process by the second quarter of 2025. As of December 31, 2024, the company had $144.4 million in cash, cash equivalents, and marketable securities. With a strong current ratio of 5.84 and minimal debt-to-equity of 0.06, the company maintains a solid balance sheet position. Despite the decrease in the price target, Raymond James did not alter its Outperform rating.
The firm noted the peculiar situation surrounding Mural Oncology’s valuation, stating that prior to today’s disclosure, the company’s shares were trading at more than 80% below its cash value. Trading at just 0.13 times book value, InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value. Raymond James suggested that even if Mural Oncology’s strategic review does not yield a favorable outcome and the company proceeds to liquidate and return cash to shareholders, the stock would still be undervalued. The firm estimates that by the end of the third quarter of 2025, Mural Oncology’s cash value per share could approximate $4.00.
Additionally, the research highlighted the potential investor interest in Mural Oncology’s deeper pipeline, particularly MURA-8518, an engineered IL-18 that was on track for Investigational New Drug (IND) submission in the first half of 2026. While this was not factored into the current target price, Raymond James acknowledged the possibility of further upside from the strategic review process, referencing a recent deal where Gilead Sciences (NASDAQ:GILD) partnered with Compugen (NASDAQ:CGEN) with a considerable upfront payment and additional milestone payment upon IND clearance of its IL-18, bringing the total potential deal value to approximately $850 million.
In other recent news, Mural Oncology announced it will cease all clinical development of its drug candidate nemvaleukin alfa after phase 2 and phase 3 trials did not meet their primary endpoints. The company holds $144.4 million in cash and equivalents as of December 31, 2024, and is actively seeking strategic alternatives, including a potential sale or merger. Analyst firms have responded to these developments with significant adjustments to their outlooks. H.C. Wainwright cut its price target for Mural Oncology shares to $6 from $18 but maintained a Buy rating, expressing cautious optimism about upcoming trials in melanoma. Raymond James downgraded the stock from ’Strong Buy’ to ’Outperform’ and also reduced the price target to $6, citing reduced confidence following the ARTISTRY-7 trial results. Morgan Stanley (NYSE:MS) shifted its rating to "Equal-weight" and set a new valuation range of $1 to $3, focusing on the anticipated topline data from the ARTISTRY-6 trial in mucosal melanoma. Jones Trading also downgraded the stock to Hold, removing the PROC indication from its valuation model and advising investors to wait for stabilization. These analysts’ actions reflect the impact of recent trial outcomes on Mural Oncology’s immediate prospects.
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