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On Wednesday, H.C. Wainwright analyst Mitchell S. Kapoor upgraded Sarepta Therapeutics (NASDAQ:SRPT) stock from Sell to Neutral, setting a price target of $75.00. The upgrade comes as the stock trades near its 52-week low of $61.52, having declined over 49% in the past six months according to InvestingPro data. Kapoor cited the stock’s achievement of the firm’s previous target price as a key reason for the adjustment. The analyst expressed that Sarepta’s current valuation aligns with expectations ahead of the company’s first quarter 2025 results, scheduled for April 30.
Sarepta Therapeutics, which is expected to report its first-quarter earnings for 2025 soon, has seen its shares trade within a range considered reasonable by H.C. Wainwright. The company has demonstrated strong financial performance, with revenue growing nearly 53% in the last twelve months to $1.9 billion. The upgrade reflects anticipation of a solid earnings report, influenced by continued demand for ELEVIDYS following its June 2024 approval for use in older and non-ambulatory groups. Kapoor noted that this demand is likely to be reflected in the upcoming earnings print.
Despite the upgrade, H.C. Wainwright maintains some reservations about Sarepta’s revenue prospects, particularly in the second half of 2025. The recent patient death due to acute liver injury linked to ELEVIDYS has raised concerns, potentially leading to increased hesitancy among prescribers and patients. While InvestingPro data shows the company maintains a healthy current ratio of 4.2 and operates with moderate debt levels, the firm questions the likelihood of Sarepta achieving its guidance of at least 160% year-over-year growth in ELEVIDYS revenues, which would imply revenues of at least $2.1 billion.
Kapoor elaborated on the skepticism surrounding the uptake of ELEVIDYS in non-ambulatory and older subpopulations of Duchenne Muscular Dystrophy (DMD) patients. These groups are estimated to make up approximately 80% of the total DMD population, yet doubts persist regarding meaningful revenue contribution from these segments.
In conclusion, H.C. Wainwright reiterated its 12-month price target of $75 per share for Sarepta Therapeutics. According to InvestingPro analysis, the stock appears overvalued at current levels, despite trading at a relatively low P/E ratio of 43.29 compared to its near-term earnings growth potential. The firm’s outlook remains cautious due to the potential challenges in the ELEVIDYS revenue ramp and the recent safety concerns that may influence future demand. For deeper insights into Sarepta’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Sarepta Therapeutics has been in the spotlight following the unfortunate death of a patient treated with its Elevidys therapy for Duchenne muscular dystrophy. Despite this incident, several analyst firms have maintained their confidence in the company. UBS reaffirmed a Buy rating with a $188 price target, emphasizing that the demand for Elevidys remains strong, given its status as the only approved gene therapy for the condition. Conversely, H.C. Wainwright reiterated a Sell rating with a $75 target, expressing concerns about the drug’s adoption due to potential risks and questioning Sarepta’s ability to meet its revenue guidance. Cantor Fitzgerald maintained an Overweight rating and a $163 target, suggesting that recent events may not broadly impact Elevidys’s use. Meanwhile, Leerink Partners held an Outperform rating with a $200 target, highlighting the low incidence rate of severe side effects and suggesting a potential buying opportunity given the anticipated strong launch of Elevidys. These developments underscore the varied perspectives among analysts about Sarepta’s future prospects amid the current challenges.
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