UPDATE: JP Morgan Downgrades Underweight on Myriad Genetics on Risk/Reward
JP Morgan reduced its rating on Myriad Genetics (NASDAQ: MYGN) from Neutral to Underweight while reiterating its $26 price target.
JP Morgan commented, "We see the investor debate in 2013 for Myriad Genetics (MYGN) as being between possible upside to earnings from continued share repurchases and the addition of BART (both of which we believe are already assumed by the Street), and downside risk from a Supreme Court ruling on the ACLU case, and to a lesser extent, Medicare reimbursement. Even if gene patentability is upheld, the company faces a patent cliff in 2018, beyond which the primary cash flow generator, the BRCA genes, will face competition. With that in mind, we believe that the risk/reward is unfavorable ahead of the SCOTUS ruling, which is likely to be a major overhang on the stock."
Myriad Genetics closed at $27.88 on Wednesday.
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