Bullish indicating open at $55-$60, IPO prices at $37
On Monday, KeyBanc reaffirmed its positive stance on Repligen (NASDAQ:RGEN) Corporation, maintaining both an Overweight rating and a $220.00 price target for the company's stock. The endorsement comes amidst discussions regarding Repligen's potential acquisition of Maravai LifeSciences Holdings, a move seen as mutually beneficial by the analyst firm. According to KeyBanc, such an acquisition would provide Repligen with a complementary range of protein products and a chance for margin growth, while allowing Maravai an exit from public trading at a more favorable valuation.
Maravai LifeSciences, known for its proprietary CleanCap technology used in Pfizer (NYSE:PFE)'s Comirnaty COVID-19 vaccine, has experienced a sharp decline in its share price following the post-pandemic reduction in revenue. Despite this downturn, the firm's portfolio remains distinctive and lucrative, particularly its Biologics Safety Testing division, which boasts EBITDA margins exceeding 65%.
The analyst from KeyBanc highlighted the attractiveness of Maravai's assets, noting the company's strong profitability in certain areas despite the overall drop in share price from its COVID-19 highs. The potential acquisition by Repligen is seen as a strategic move, given Repligen's history of successful acquisitions and Maravai's reported interest from various buyers, including private equity and strategic acquirers, in recent years.
At present, no official offer has been confirmed, and it remains uncertain whether Repligen would seek to acquire all of Maravai or specifically its Biologics Safety Testing business. The companies have not verified any of the acquisition rumors that have been reported.
In other recent news, Repligen Corporation is in acquisition talks with Maravai LifeSciences Holdings, Inc., according to Stifel, which reaffirmed its Buy rating and a $207.00 price target for Repligen. The potential acquisition, if valued at $3 billion, would be Repligen's largest to date and could represent approximately 10 times Maravai's projected 2025 sales. Stifel's analysis indicates a good product fit between the two companies, but expressed caution regarding the strategic benefits of the acquisition.
In the meantime, Morgan Stanley has downgraded Maravai LifeSciences' stock from Overweight to Equalweight, lowering the price target to $10. This decision followed a review of the company's Q2 results and management's commentary, which included steady performance with revenues of $73 million and an adjusted EBITDA of $17 million. The company also announced the establishment of a new mRNA research center at Johns Hopkins University and the launch of several new products.
These recent developments come amidst financial projections for Maravai indicating a growth of 7% as per street estimates and 10% according to Stifel's analysis for the year 2025. However, these rates are considered dilutive to Repligen's forecasted 14% growth for the next year. Despite these potential complexities, Maravai LifeSciences maintains a strong balance sheet and anticipates revenue growth from new products.
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