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Barclays maintains Overweight on Twist Bioscience shares, sees opportunity

EditorNatashya Angelica
Published 06/04/2024, 10:59 AM

On Tuesday, Twist Bioscience (NASDAQ:TWST) Corporation (NASDAQ:TWST), a synthetic biology company, retained its Overweight rating with a steady stock price target of $45.00, as confirmed by Barclays. The firm identified a potential opportunity for Twist Bioscience in the wake of recent government inquiries into a competitor's business operations.

The Select Committee on the Chinese Communist Party (CCP) has sought information regarding GenScript, a competitor of Twist Bioscience, concerning its business dealings and connections to the CCP. This request is part of the Biosecure Act, aimed at scrutinizing foreign involvement in critical sectors.

Barclays sees this development as an advantageous situation for Twist Bioscience and other U.S.-based synthetic DNA suppliers, such as Danaher Corporation (NYSE:DHR)'s Integrated DNA Technologies (IDT). The scrutiny on GenScript by U.S. authorities could potentially lead to market share gains for domestic companies in the synthetic DNA space.

The Overweight rating indicates that Barclays expects Twist Bioscience's stock to perform better than the average return of the stocks that Barclays covers, while the $45.00 stock price target suggests a level that the stock is expected to reach in the medium term, according to the firm's analysis.

Twist Bioscience specializes in manufacturing synthetic DNA for clients across industries, including healthcare, agriculture, industrial chemicals, and data storage. The company's technology enables the rapid, high-throughput synthesis of DNA at scale, which is crucial for research and development in various fields.

In other recent news, Twist Bioscience Corporation reported a substantial 25% increase in revenue for the fiscal 2024 second quarter, amounting to $75.3 million. This growth was primarily driven by the company's synthetic biology product line and Next-Generation Sequencing (NGS) segment, which led to a gross margin exceeding expectations at 41%. Looking forward, Twist Bioscience anticipates a gross margin above 50% by the end of fiscal 2025.

The company concluded the quarter with a robust $292 million in cash, cash equivalents, and short-term investments. Twist Bioscience also predicts its total revenue for fiscal 2024 to be between $300 million and $304 million, with a gross margin of 41.5% to 42%. Despite reporting a net loss of $45.5 million for the quarter, the company remains optimistic about its market position, particularly in the biopharma sector.

These developments are recent and reflect the company's ongoing financial performance and market strategies. CEO Emily Leproust has highlighted the positive impact of new FDA regulations on the diagnostics market, favoring larger players, and the company's readiness for US regulatory changes. With strong revenue growth and a solid cash position, Twist Bioscience continues to look confidently towards the future.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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