Brookline Capital Sets $40 Price Target and Buy Rating for Exelixis Stock
On Thursday, Brookline Capital Markets initiated coverage on biotechnology company Exelixis, Inc. (NASDAQ:EXEL) with a Buy recommendation and a target price of $40. Currently trading at $33.82 and possessing an "EXCELLENT" financial health rating according to InvestingPro, the company has demonstrated strong momentum with a 51% price return over the past six months.
The firm's analysts predict significant growth in sales for Exelixis’s current products, Cabometyx and Cometriq, and anticipate successful development and commercialization of new products from its pipeline in the coming years. Brookline Capital Markets’ analysts expect Exelixis's total revenue to grow at a compound annual growth rate (CAGR) of 15% over the next 7-10 years, potentially reaching $7.1 billion by 2033.
This optimistic outlook aligns with the company’s current performance; InvestingPro data shows a 17.3% increase in revenues over the last twelve months and analysts expect growth to continue this year. This forecast is based on the company’s capability to increase unit sales, add indications for Cabometyx, and launch new products.
According to analysts, Exelixis's total product sales are likely to rise to $6.7 billion by 2033. This increase will be supported by additional indications for Cabometyx and the launch of another significant product. These projections depend on successful product launches and market acceptance.
The initiation of coverage reflects Brookline Capital Markets' confidence in Exelixis's strategic growth initiatives and product development. Analysts emphasized that the revenue forecasts are achievable, yet cautioned about the high degree of risk associated with all programs in the development stage.
In their analysis, Brookline Capital Markets concluded that, on a probability and investment risk-adjusted basis, Exelixis could reach a valuation of $40 per share within the next 12 to 18 months. This assessment considers the company's current development trajectory and the expected expansion of its product offerings.
In other recent news, Exelixis, Inc. reported a 9% increase in net product revenues, reaching $478 million, and raised its full-year revenue guidance for 2024. This strong financial performance was highlighted during the company’s Q3 Earnings Call for 2024.
Meanwhile, despite raising their price targets, BMO Capital Markets and BofA Securities downgraded Exelixis due to a more balanced risk/reward scenario. The U.S. Food and Drug Administration (FDA) has scheduled an Oncologic Drugs Advisory Committee (ODAC) meeting for Exelixis's supplemental New Drug Application (sNDA) for CABOMETYX, with a decision expected by April 3, 2025.
Exelixis is also expanding its oncology portfolio, including a collaboration with Merck for zanzalintinib. These are some of the recent developments that investors should be aware of regarding the company’s future trajectory.