Hold Rating on Prime Medicine, Inc. Amid Strategic Shifts and Financial Reevaluation

Morgan Stanley analyst Terence Flynn has maintained their neutral stance on PRME stock, giving a Hold rating on May 20.

Terence Flynn has given his Hold rating due to a combination of factors surrounding Prime Medicine, Inc.’s recent strategic decisions and financial projections. The company has undergone a pipeline re-prioritization, choosing not to pursue its chronic granulomatous disease (CGD) programs internally, which has led to a revision of their projected revenues for 2030 and 2035. This decision, along with a leadership transition, has prompted a reevaluation of their financial outlook.
Additionally, Flynn notes that the company has implemented cost-reduction measures, leading to a decrease in R&D expenses from 2026 onwards. The delay in commercialization timelines has also resulted in pushing out the increase in SG&A expenses to 2029. These adjustments have influenced the base case valuation range to be revised to $1-$7 from the previous $2-$9. The valuation is based on a discounted cash flow analysis, considering a 15% discount rate and a 2% terminal growth rate, which supports the Hold rating.

According to TipRanks, Flynn is a 3-star analyst with an average return of 2.5% and a 51.77% success rate. Flynn covers the Healthcare sector, focusing on stocks such as BioNTech SE, Eli Lilly & Co, and Gilead Sciences.