AndreyPopov
UBS has downgraded Cytokinetics (NASDAQ:CYTK) to neutral, commenting that it believes some of the potential M&A premium has already been baked into the stock’s price.
The investment bank said that its prior bullish stance was based on the company’s Phase 3 study results for aficamten, which has played out.
“From here, we believe the stock trajectory is contingent on M&A, which we think is difficult to predict,” the analysts wrote in their note.
UBS said that while aficamten is a “rare quality biotech asset that can fit well in a large-cap company’s portfolio,” it was “difficult to predict whether an acquisition is likely to materialize.” It noted recent reports about Novartis supposedly walking away from a potential deal while AstraZeneca may have interest.
The bank said its stand-alone valuation of the company is $78, with a potential takeout valuation of $105, bringing it to its current price target of $92. It sees the potential takeout valuation ranging from $84 to $127 per share.
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