On Wednesday, Goldman Sachs (NYSE:GS) updated its financial model for Roivant Sciences (NASDAQ:ROIV), leading to an increase in the company's price target to $16.00, up from the previous $13.00. The firm continues to recommend a Buy rating for the stock. The revisions to the model were made to align estimates across overlapping programs with subsidiary IMVT.
The adjustment by Goldman Sachs reflects a shift in the way revenue estimates for Roivant Sciences are calculated, particularly for the batoclimab/IMVT-1402 programs. These programs target various indications such as myasthenia gravis, chronic inflammatory demyelinating polyradiculoneuropathy, thyroid eye disease, and Graves' disease. The new estimates are now based on IMVT's market model for each indication.
Additionally, Goldman Sachs has decided to exclude revenue projections for batoclimab/IMVT-1402 in rheumatoid arthritis from their model. This decision is due to uncertainties surrounding the development pathway for this particular indication.
In their report, Goldman Sachs also updated the sum-of-the-parts (SOTP) valuation for IMVT, which now reflects a 12-month forward valuation based on a discounted cash flow analysis. This update has contributed to the increase in the estimated value per share for Roivant Sciences.
The changes made by Goldman Sachs to their financial model have resulted in an upward revision of both the SOTP and discounted cash flow (DCF) values per share to $16. Consequently, this has established a new 12-month price target for Roivant Sciences at $16, marking a notable increase from the prior target of $13.
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