In a report released today, Mitchell Kapoor from H.C. Wainwright reiterated a Hold rating on Sarepta Therapeutics (SRPT – Research Report), with a price target of $40.00.
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Mitchell Kapoor has given his Hold rating due to a combination of factors surrounding Sarepta Therapeutics’ current market position and future prospects. The recent conditional approval of ELEVIDYS in Japan for young patients with Duchenne muscular dystrophy is a positive step, but the financial benefits for Sarepta are limited to royalty payments, as commercialization in Japan is handled by Chugai Pharmaceuticals through its alliance with Roche. This approval, while expanding the total addressable market for ELEVIDYS, does not significantly alter the economic landscape for Sarepta.
Furthermore, Kapoor expresses concerns about the broader adoption of ELEVIDYS, particularly in non-ambulatory and older patient populations, which constitute a large portion of the potential market. The valuation of Sarepta is based on a discounted cash flow model, with a 12% discount rate and a 2% terminal rate of decline, leading to a firm value of $4.0 billion and a 12-month price target of $40 per share. While the probability of approval for Sarepta’s key products is high, there are risks related to market adoption and clinical data outcomes that contribute to the Hold rating.
In another report released on May 8, Evercore ISI also downgraded the stock to a Hold with a $50.00 price target.