On Friday, BMO Capital Markets adjusted their financial outlook for Terns Pharmaceuticals (NASDAQ:TERN), increasing the stock's price target to $19.00, up from the previous $18.00. The firm has maintained its Outperform rating on the shares. This adjustment follows Terns Pharmaceuticals' fiscal year 2023 results and business updates, which aligned with BMO's projections.
The company's ongoing Phase 1 CARDINAL trial, which is evaluating TERN-701 for the treatment of chronic myeloid leukemia (CML), is proceeding as anticipated. A clinical update is expected in the second half of the year. Additionally, Terns Pharmaceuticals is planning a Key Opinion Leader (KOL) event around the middle of the year.
In conjunction with these developments, the Phase 1 safety and 28-day weight loss data for TERN-601 is also anticipated in the latter half of the year. This timeline remains consistent with the guidance previously provided by the company. BMO Capital's positive stance on Terns Pharmaceuticals is reinforced by the expected data disclosures in the second half of the year.
The analyst from BMO Capital expressed confidence in the company's trajectory, stating, "We continue to like TERN's setup ahead of 2H data disclosures and reiterate OP rating with a target price of $19 (from $18) following our FY23 model update." This statement underscores the firm's expectation of Terns Pharmaceuticals' continued progress and potential for growth.
InvestingPro Insights
Following BMO Capital Markets' recent price target increase for Terns Pharmaceuticals, InvestingPro provides additional insights that may be valuable for investors considering the company's stock. Terns Pharmaceuticals holds a market capitalization of approximately $414.64 million, indicating a notable presence within its sector. Despite this, the company's price-to-earnings (P/E) ratio stands at -5.21, with an adjusted P/E ratio for the last twelve months as of Q4 2023 at -4.6, reflecting investor sentiment regarding its earnings potential.
One of the notable InvestingPro Tips for Terns Pharmaceuticals is that the company holds more cash than debt on its balance sheet, which could be a sign of financial stability. However, the company is also quickly burning through cash, which is a concern for its liquidity and long-term financial health. This is particularly relevant given that analysts do not anticipate the company will be profitable this year, and net income is expected to drop.
From a performance standpoint, Terns Pharmaceuticals has experienced a large price uptick over the last six months, with a 31.05% return. Yet, the stock has taken a significant hit over the last week, with a price total return of -17.26%. The current price is at 47.78% of its 52-week high, which may suggest room for growth if the company's forthcoming clinical updates prove favorable.
Investors seeking a deeper analysis can find additional InvestingPro Tips for Terns Pharmaceuticals, which offer a comprehensive look at the company's financial health, stock performance, and market potential. For those interested in a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24 to get an additional 10% off. There are 9 additional tips listed in InvestingPro for Terns Pharmaceuticals, which could provide further guidance for your investment decisions.
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