Scholar Rock stock rating initiated at Buy by Jefferies with $50 target

Investing.com - Jefferies has initiated coverage on Scholar Rock (NASDAQ:SRRK) with a Buy rating and a price target of $50.00, according to a research note released Thursday. The company, currently valued at $3.3 billion, has received strong backing from Wall Street, with analyst consensus showing a Strong Buy recommendation and price targets ranging from $45 to $54. According to InvestingPro analysis, the stock appears to be trading near its Fair Value.

The research firm expressed confidence in the company’s lead drug candidate apitegromab, which is currently awaiting FDA approval for spinal muscular atrophy (SMA). Jefferies expects the drug to receive approval with a broad label for patients aged 2 years and older across SMA types 1-4, including both ambulatory and non-ambulatory patients. InvestingPro data reveals the company maintains strong liquidity with a current ratio of 6.33, providing financial flexibility during this crucial approval phase.

Jefferies noted there could potentially be a first-quarter delay to the current September 22 PDUFA date due to "procedural observations from recent FDA site inspection," but this does not appear to affect their overall positive outlook on approval chances.

The firm models a $1.8 billion risk-adjusted peak sales estimate for apitegromab, with probability of success rated at 90% in patients 2 years and older and 50% in patients under 2 years of age.

Beyond the SMA indication, Jefferies sees additional value potential in apitegromab and SRK-439 for other neuromuscular disorders including Duchenne muscular dystrophy (DMD) and facioscapulohumeral muscular dystrophy (FSHD), as well as potential applications in obesity through partnership opportunities. The stock has demonstrated remarkable momentum, posting a 271% return over the past year. Subscribers to InvestingPro can access 11 additional investment tips and a comprehensive analysis of Scholar Rock’s growth prospects.

In other recent news, Scholar Rock reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of -0.98, which was below analysts’ expectations of -0.66. This earnings miss has raised concerns among investors regarding the company’s financial performance. Furthermore, BMO Capital has adjusted its price target for Scholar Rock from $57.00 to $45.00, while maintaining an Outperform rating. The adjustment is due to ongoing issues at Novo’s Catalent (NYSE:CTLT) facilities, which may affect the PDUFA date for Scholar Rock’s investigational drug, apitegromab.

Despite these challenges, Raymond (NSE:RYMD) James reaffirmed its Strong Buy rating on Scholar Rock, with a price target of $53.00. This endorsement comes as the company approaches a significant PDUFA date for apitegromab. These developments provide a mixed outlook for Scholar Rock as it navigates financial and regulatory hurdles.

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