Morgan Stanley analyst Tejas Savant maintained a Hold rating on Pacific Biosciences (PACB – Research Report) on February 14 and set a price target of $2.00.
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Tejas Savant has given his Hold rating due to a combination of factors impacting Pacific Biosciences’ outlook. The company’s fourth-quarter results aligned with preliminary expectations, but challenges such as the lower average selling prices of Revio systems and issues with SMRT Cell manufacturing affected its gross margins. Additionally, the revenue guidance for 2025 fell short of expectations, largely due to uncertainties in macroeconomic conditions and concerns about NIH funding, which constitutes a significant portion of their sales.
Despite these challenges, there are some positive aspects, such as the encouraging early traction of the Vega system, which could help counterbalance the decline in Revio shipments in the latter half of the year. However, the timeline for achieving cash flow breakeven has been pushed back by a year to the end of 2027. Overall, while there are growth opportunities, the current uncertainties and financial performance constraints justify maintaining a Hold rating until there is clearer visibility into the company’s future prospects.
In another report released on February 14, UBS also maintained a Hold rating on the stock with a $1.50 price target.
PACB’s price has also changed moderately for the past six months – from $1.350 to $1.850, which is a 37.04% increase.