On Wednesday, Arvinas Inc. (NASDAQ:ARVN) experienced a shift in its stock rating as Citi moved the company from a 'Buy' to a 'Neutral' stance, while simultaneously increasing the price target to $55.00, up from the previous $36.00. This change comes after Arvinas' stock surged by more than 200% over the past three months. The significant rise in stock value was partly driven by positive updates on the efficacy of vepdegestrant in combination with palbociclib in a Phase 1b trial, particularly in the treatment of ER+ breast cancer.
The revised price target reflects Citi's reassessment of Arvinas' market potential, especially considering the inclusion of vepdegestrant in both first and second-line metastatic settings; previously, it was only considered for third-line treatment. This reevaluation has led to an approximate doubling of the worldwide peak sales estimates for Arvinas, from $1.8B to $3.6B.
Despite the increased sales forecast and price target, Citi believes that the risk/reward balance for Arvinas is now more even. The new target price implies an estimated return of roughly 15%, which suggests that the stock's current valuation is in line with its market prospects. Consequently, Citi has adjusted its rating to reflect a more cautious outlook on the company's stock.
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