JPMorgan Checks In On Myriad Genetics Following 30% Rally

June 29, 2017

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Courtesy of Benzinga.

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Myriad Genetics, Inc.’s (NASDAQ: MYGN) strong run has caught investors attentions, however, JPMorgan analyst Tycho Peterson still doesn’t see the stock being able to offset a decline in the hereditary cancer business.

Peterson maintained his Underweight rating and $16 price target.

“While in the past, the esoteric LDT market was viewed as sitting at the nexus of the secular shift in healthcare towards personalized medicine, this vision has, in our view, run up against the reality that the LDT business model has a number of challenges, with many labs attempting to support a pharma model centered around heavy rep counts without the benefit of patent protection,” Peterson said.

Myriad Will Still Remain A Heavily Debated Stock As It Has Many Likeable Qualities

While Peterson expects the stock to fall to $16 – it trades around $25.60 per share – he noted the stock could still move in either direction.

“Myriad represents, in our view, a significant opportunity, given near-term catalysts that could drive the stock meaningfully higher or lower, with the setting of FY18 guidance during F4Q earnings (including forward expectations for hereditary cancer) being the most significant upcoming event post-UNH renewal,” he said.

However, “with its core business in (arguably) structural decline and pipeline that could be long on potential, but short on near-term financial impact, Myriad is not an easy company to value. While we believe the pipeline is intriguing, we do not believe that it can offset what we expect to be a continued steady decline in the core hereditary cancer business.”