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On Monday, RBC Capital initiated coverage on Aardvark Therapeutics Inc (NASDAQ:AARD), awarding the stock an Outperform rating and setting a price target of $21.00. The stock, currently trading at $10.13, has significant upside potential according to analysts, with a consensus target of $22.00. InvestingPro analysis reveals several key insights about the company’s financial position, with 6 additional ProTips available to subscribers. The new rating comes with an optimistic outlook on the company’s potential in the Prader-Willi Syndrome (PWS) market, driven by its lead drug ARD-101. RBC Capital’s analysis suggests that the preclinical evidence and early clinical activity indicate a promising future for the drug, which also has potential applications in orphan diseases and broader obesity treatments.
Aardvark Therapeutics, which recently went public on February 12, 2025, at a price of $16 per share, is now poised for growth with its novel approach to tackling hunger pathways. With a market capitalization of $216.62 million, the company maintains a strong financial position, holding more cash than debt and boasting a healthy current ratio of 31.65x. According to InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value. The company’s focus on PWS—a genetic disorder characterized by insatiable hunger, among other symptoms—places it in a market with significant opportunities for expansion and impact.
The RBC Capital analyst pointed to the upcoming PDUFA (Prescription Drug User Fee Act) decision for a competing PWS treatment as a potential catalyst for increased near-term attention on the disorder. This event could also have a positive influence on Aardvark Therapeutics’ market position.
Furthermore, the analyst highlighted the prospect of substantial valuation gains for Aardvark Therapeutics, based on anticipated data points from the company’s ARD-101 and ARD-201 programs expected by mid-2026. These developments are seen as de-risking milestones that could further establish the company’s drugs in the market.
The Outperform rating signifies RBC Capital’s confidence in Aardvark Therapeutics’ stock outperforming the average total return of the stocks covered by the analyst in the sector. The Speculative Risk qualifier acknowledges the inherent uncertainties and high-risk nature of the biotechnology industry, particularly for companies like Aardvark Therapeutics that are in the early stages of drug development and commercialization. Recent market performance has been challenging, with the stock declining 20.42% in the past week. For deeper insights into AARD’s valuation and financial health metrics, visit InvestingPro.
In other recent news, Aardvark Therapeutics Inc has drawn attention from major financial institutions with favorable analyst coverage. BofA Securities initiated coverage on the company, assigning a Buy rating and a price target of $22.00. The firm expressed optimism about Aardvark’s lead drug, ARD-101, which is currently in phase 3 trials for Prader-Willi syndrome (PWS), a rare genetic disorder with no approved treatments. This optimism is based on preliminary data from a small trial, which suggests potential benefits outweigh the risks. Morgan Stanley (NYSE:MS) also initiated coverage, rating the stock as Overweight with a price target of $29.00. The firm highlighted ARD-101’s favorable safety profile and its potential to treat obesity-related conditions, including hypothalamic obesity (HO). Morgan Stanley anticipates that Phase 3 data expected in early 2026 will confirm the drug’s efficacy in PWS and contribute to the company’s growth. Both firms’ coverage underscores the significant unmet medical needs Aardvark aims to address in the metabolic disorders space.
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