Stifel analyst Stephen Willey downgraded Inovio Pharmaceuticals to Hold from Buy with a price target of $24, up from $19. The stock closed Thursday up 31%, or $7.38, to $31.25. The over $6B fully diluted valuation more appropriately reflects a balanced risk/reward profile ahead of approaching events, Willey tells investors in a research note. While peer COVID-19 vaccine company valuations suggest possible significant further upside in the shares should promising immunogenicity data and a large government check materialize, any potential downside risk in the absence of the aforementioned events occurring is “equally-significant,” says the analyst. Despite downgrading, Willey says the “significant socioeconomic importance of a viable COVID-19 vaccine candidate creates a scenario whereby hope/sentiment displaces valuation,” and that he believes Inovio’s core DNA vaccine technology has remained mostly underappreciated relative to competitive platforms.
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