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Barclays Downgrades Myriad, Says Hereditary Cancer Testing Losses Came Faster Than Expected

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Barclays Downgrades Myriad, Says Hereditary Cancer Testing Losses Came Faster Than Expected

Barclays’ Jack Meehan expressed concern regarding the competitive weakness in Myriad Genetics, Inc.’s (NASDAQ: MYGN) Hereditary Cancer Testing (HCT) business, expecting it to pressure the company’s overall results.

Meehan downgraded the rating on the company from Overweight to Equal-Weight, while lowering the price target from $50 to $24. The analyst noted the company’s FY17 guidance was significantly below the estimates on both revenue and EPS.

Competitive Pressure

“While we continue to be positive on the new product strategy, the contribution does not appear to be big and fast enough to offset HCT pressure in the next year,” Meehan stated, while adding, “At this point, we view the thesis as much more balanced than our previous expectations.”

The analyst explained that the increasing competitive pressure for HCT was eroding the business faster than expected, even by the company, a quarter ago. This lowers the visibility into the longer term outlook for the business.

HCT Share Losses

In addition, Meehan stated the “incremental market share loss is having a notable impact today on the business.”

The analyst also expressed concern regarding the turnover in the sales organization ahead of new oncology product launches over the next few years.

“We still view the new product strategy as compelling,” Meehan said, while adding, “We believe valuation does provide some floor for shares.”

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Latest Ratings for MYGN

DateFirmActionFromTo
Jan 2019UpgradesMarket PerformOutperform
Jan 2019MaintainsUnderweightUnderweight
Jan 2019Initiates Coverage OnStrong Buy

View More Analyst Ratings for MYGN
View the Latest Analyst Ratings

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