Truist Securities has adjusted its price target for Exelixis (NASDAQ: NASDAQ:EXEL), a biotechnology company, raising it to $33 from $32 as the firm maintained a Buy rating on the stock. The adjustment follows Exelixis' recent performance, driven by growth in its Cabometyx franchise.
The securities firm highlighted the growth potential stemming from the drug's use in kidney cancer (RCC), an already approved indication, and its anticipated approval for treating Neuroendocrine tumors (NET) by April.
The firm's optimism is also partly due to the expected favorable outcome of the ongoing patent litigation concerning the MSN2 case, which has taken longer than expected. A decision is awaited imminently, and Truist Securities anticipates a positive result for Exelixis.
In their commentary, the analyst from Truist Securities noted the "beat & raise headline" from Exelixis, indicating the company's financial performance exceeded expectations and that future projections have been increased. This performance, along with the anticipated product approvals and a positive resolution to the patent case, are seen as catalysts for the stock's potential rise.
The firm has made some adjustments to its model for Exelixis, which led to the increased price target. The new target reflects a slightly more optimistic valuation of the company's prospects, taking into account the potential market expansion for Cabometyx and the expected resolution of the patent litigation.
Meanwhile, H.C. Wainwright has adjusted its outlook on Exelixis, increasing the 12-month price target to $29 from the previous $28, while maintaining a Buy rating on the stock. The firm has also revised its full-year 2024 net earnings projection for Exelixis to $1.54 per share, up from the previous estimate of $1.14 per share.
In addition to the strong financial performance, Exelixis has made progress in its development programs. The company's supplementary NDA for cabozantinib in the treatment of neuroendocrine tumors (NET) has been accepted by the FDA, with a PDUFA date set for April 3, 2025.
Furthermore, Exelixis is actively assessing the development of XL309 and plans to file up to three INDs this year. Despite the discontinuation of the XB002 program, Exelixis remains optimistic about its pipeline, including the potential expansion of its cabozantinib franchise with new indications and compounds.
InvestingPro Insights
As Exelixis (NASDAQ:EXEL) continues to impress with its performance, particularly with the growth of its Cabometyx franchise, a closer look at the company's financials and market position through InvestingPro data reveals several key insights. The company boasts a solid market capitalization of $7.68 billion and trades at a P/E ratio of 20.53, which is relatively low when considering its near-term earnings growth. Additionally, the stock's PEG ratio of 0.17 suggests that it may be undervalued based on its earnings growth rate.
InvestingPro Tips for Exelixis indicate that management has been actively buying back shares, a sign of confidence in the company's value. Furthermore, Exelixis is operating with a moderate level of debt and has liquid assets that exceed its short-term obligations, which speaks to its financial health. For investors looking for more detailed guidance, there are 16 additional InvestingPro Tips available, including insights on earnings revisions and the stock's performance over various timeframes.
With a robust gross profit margin of 96.06% over the last twelve months and an operating income margin of 20%, the company's profitability is clear. These figures, complemented by a strong return of 29.37% over the past year and the stock trading near its 52-week high at 97.9% of the peak price, underscore the positive sentiment surrounding Exelixis. Investors can access more in-depth analysis and metrics on Exelixis by visiting https://www.investing.com/pro/EXEL.
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