Scotiabank starts PTC Therapeutics stock with Sector Perform rating

On Friday, Scotiabank (TSX:BNS) initiated coverage on PTC (NASDAQ:PTC) Therapeutics (NASDAQ:PTCT) shares, assigning a Sector Perform rating and establishing a price target of $55.00. The coverage by Scotiabank comes as PTC Therapeutics’ stock has seen a significant increase of approximately 71% over the past 12 months, outperforming the S&P 500’s rise of about 14%.

Scotiabank’s analysis suggests that PTC Therapeutics is currently fairly valued in the market. Their discounted cash flow (DCF) analysis estimates the equity value of the company’s base business at around $500 million. Given PTC Therapeutics’ market capitalization of $4.16 billion and current revenue of $806.78 million, the firm believes that the market has already priced in roughly $3.5 billion for the company’s pipeline. InvestingPro’s Fair Value analysis suggests the stock is slightly overvalued at current levels.

The analyst from Scotiabank highlighted the company’s expectations for sepiapterin sales to reach approximately $1 billion. This projection leaves an estimated $2 billion to $3 billion in market capitalization attributed to sepiapterin, with the remaining $0.5 billion to $1.5 billion ascribed to other pipeline projects, such as vatiquinone and PTC518. According to Scotiabank, this valuation for the rest of the pipeline is generous.

The Sector Perform rating indicates that Scotiabank views PTC Therapeutics’ stock as likely to perform on par with the expectations for the sector. The price target of $55.00 per share is reflective of the analyst’s view of the company’s current valuation and future prospects based on their analysis.

In other recent news, PTC Therapeutics reported its fourth-quarter 2024 earnings, showing a slight miss in earnings per share (EPS) but aligning with revenue expectations. The company posted an EPS of -$0.85, missing the forecasted -$0.79, while revenue was reported at $213 million, slightly below the anticipated $213.45 million. For the full year 2024, PTC Therapeutics exceeded its revenue guidance with a total of $877 million, supported by significant contributions from its DMD franchise. The company’s cash reserves were bolstered by a $1 billion payment from Novartis (SIX:NOVN), positioning it well for future initiatives. Cantor Fitzgerald maintained an Overweight rating on PTC Therapeutics, with a price target of $113.00, reflecting confidence in the company’s potential despite acknowledging challenges in the financial outlook. The firm adjusted its model to align with PTC Therapeutics’ 2025 guidance, projecting slightly lower revenues but maintaining optimism about the company’s stock performance. These developments underscore PTC Therapeutics’ strategic moves and financial positioning as it navigates upcoming regulatory and market challenges.

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