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Investing.com - William Blair downgraded Sarepta Therapeutics (NASDAQ:SRPT) stock rating from Outperform to Market Perform on Friday, adding to the stock’s recent challenges that have seen it decline over 42% in the past week and 83% year-to-date.
The downgrade reflects the investment firm’s view that Sarepta’s peak revenue opportunity has been reduced, despite continued strong interest in the company’s Elevidys treatment among commercial ambulatory patients. According to InvestingPro data, five analysts have recently revised their earnings expectations downward for the upcoming period.
William Blair noted that while a higher share price remains justified based on their discounted cash flow analysis, several factors prompted the rating change.
The firm specifically cited "a growing number of uncertain variables" that it believes will deter investors from the biotechnology company’s stock in the coming periods.
William Blair concluded that these factors collectively limit the stock’s near-term upside potential, leading to the Market Perform rating decision.
In other recent news, Sarepta Therapeutics is facing significant challenges following safety concerns related to its Duchenne muscular dystrophy treatment, Elevidys. The company reported a second fatal case of acute liver failure linked to the treatment, prompting Sarepta to suspend shipments for non-ambulatory patients. This development led Mizuho (NYSE:MFG) to lower its price target for Sarepta to $40, although the firm maintained an Outperform rating, suggesting potential for recovery in ambulatory settings. TD Cowen downgraded the stock from Buy to Hold, citing an increased probability of Elevidys losing FDA approval due to safety concerns, and reduced its price target to $24. Similarly, Evercore ISI adjusted its projections, lowering the price target to $28 and removing non-ambulatory sales from its forecasts, while expressing uncertainty about future sales growth. Goldman Sachs also downgraded Sarepta to Neutral with a $29 price target, highlighting uncertainty over the safety risk to ambulatory patients and the potential regulatory implications. Wolfe Research initiated coverage with a peerperform rating, setting a fair value of $19 per share, and noted that while revenue recovery is possible, safety issues could pose ongoing risks. These developments underscore the challenges Sarepta faces in navigating the safety concerns and potential market impacts of its Elevidys treatment.
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