In a research report released Friday, Maxim analyst Jason McCarthy reiterated a Buy rating on shares of Juno Therapeutics Inc (NASDAQ:JUNO), while slashing the price target to $50 (from $80), as he believes that the approval of JCAR015, the company’s CAR-T therapy for acute myeloid leukemia, has been delayed.
McCarthy wrote, “The approval of JCAR015 has been pushed back to 2018 (pivotal data late 2016), and we factor in slower uptake into “less sick” patients. In addition, we believe approval of additional CARs in larger indications like lymphoma will require more time. As such, we have pushed back potential commercialization to 2020 (from 2018).”
However, “We believe it is prudent to adjust our assumptions given a combination of the bearish biotech market environment, catalysts, and revisions to our therapeutic model, as well as other related assumptions. We then apply a modest discount rate of 15% to our free cash flow, discounted EPS and sum-of-the-parts models, which are equally weighted. The net result is a reduction in our price target to $50, from $80, which still supports a Buy rating given Juno’s valuation today.”
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason McCarthy has a yearly average return of -3.6% and a 39% success rate. McCarthy has a -16.7% average return when recommending JUNO, and is ranked #3642 out of 4090 analysts.
Out of the 12 analysts polled by TipRanks, 8 rate Juno Therapeutics stock a Buy, while 4 rate the stock a Hold. With a return potential of 72.8%, the stock’s consensus target price stands at $53.44.
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