On Wednesday, Truist Securities expressed a positive outlook on Exelixis (NASDAQ:EXEL) shares, with analyst Asthika Goonewardene increasing the price target to $42 from the previous $38 while reaffirming a Buy rating.
The adjustment reflects a favorable view of the company's performance and potential, particularly regarding the sales prospects for its drug Cabometyx in treating neuroendocrine tumors (NET). The stock, currently trading at $35.65, is near its 52-week high of $36.97, and according to InvestingPro's Fair Value analysis, appears fairly valued.
Goonewardene's assessment suggests that despite the recent rise in Exelixis's stock price, there remains room for further appreciation, supported by the company's impressive 58% gain over the past six months.
The revised price target incorporates additional sales potential for Cabometyx and other adjustments to the financial model. The analyst also pointed to Zanza, a derivative of Cabometyx, which is anticipated to have multiple significant developments in 2025 that could further elevate the price target.
In the context of fluctuating biotech markets, Goonewardene believes that Exelixis stands out due to the stable and growing nature of its core business, evidenced by its robust 96.25% gross margin and $2.08 billion in revenue. The company's revenue generation combined with potential upcoming catalysts presents an attractive investment opportunity for the year. InvestingPro analysis reveals a GREAT financial health score, with 12 additional ProTips available to subscribers.
The analyst's comments highlight the company's robust fundamentals and the potential for value creation through its pipeline, particularly Zanza, which is expected to contribute to Exelixis's growth trajectory. Truist Securities' enhanced price target suggests confidence in Exelixis's ability to continue its positive momentum in the biotech sector. A comprehensive analysis of Exelixis's growth potential and financial metrics is available in the Pro Research Report on InvestingPro.
In other recent news, Exelixis has been the subject of several significant developments. Guggenheim maintained a Buy rating on Exelixis and increased the price target to $42, reflecting optimism about the late-stage pipeline asset, zanzalintinib.
Meanwhile, Brookline Capital Markets initiated coverage on Exelixis with a Buy rating and a price target of $40, projecting significant growth in sales of existing products and successful commercialization of new products.
However, BMO (TSX:BMO) Capital Markets and BofA Securities downgraded Exelixis due to a more balanced risk/reward scenario, despite raising their price targets. The U.S. Food and Drug Administration (FDA) has scheduled an Oncologic Drugs Advisory Committee (ODAC) meeting for Exelixis's supplemental New Drug Application (sNDA) for CABOMETYX, with a decision expected soon.
Exelixis also reported a 9% increase in net product revenues, reaching $478 million, leading to a raised full-year revenue guidance for 2024. These developments come in the wake of Exelixis's collaboration with Merck (NS:PROR) for zanzalintinib and the ongoing clinical trials for this multi-kinase inhibitor.
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