On Monday, BMO Capital Markets maintained a positive outlook on Sarepta Therapeutics (NASDAQ:SRPT), reiterating an Outperform rating and a price target of $200.00.
"We think SRPT has been significantly undervalued as reflected by its valuation levels," said analysts at the firm, adding that valuation levels had recently dropped to about 20% below the pre-PDUFA levels of Elevidys, and approximately three times its consensus 2025 revenues.
The recent partnership between Sarepta and Arrowhead Pharmaceuticals (NASDAQ:ARWR), announced on November 26, has reignited significant investor interest. Following the announcement, Sarepta's shares saw a 14% increase at market close. The deal is seen as a positive move that addresses concerns regarding near-term catalysts and long-term sustainable growth.
BMO Capital highlights the strategic significance of the SRPT/ARWR deal, praising Sarepta's management for its execution capabilities, particularly in the neuromuscular space.
The partnership includes four clinical stage pipeline programs that cover a range of therapeutic areas including neuromuscular, pulmonary, and central nervous system diseases.
The deal, expected to finalize in early 2025, includes a $500 million upfront payment, a $325 million equity investment in Arrowhead, and an additional $250 million over the next five years. This partnership is anticipated to enhance Sarepta's research and development capabilities, adding potentially 13 RNAi programs to its pipeline.
Analysts from financial firms Piper Sandler, Needham, Morgan Stanley (NYSE:MS), and Mizuho (NYSE:MFG) have maintained positive ratings on Sarepta's stock, indicating confidence in the company's position and growth potential. Sarepta Therapeutics also recently released its financial results for the third quarter of 2024, demonstrating its commitment to transparency in communications with investors.
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