Goldman Sachs Models 22% Downside To Myriad Genetics

Shares of the molecular diagnostics name Myriad Genetics MYGN are worth less than what the Street is paying, according to Goldman Sachs. 

The Analyst

Goldman Sachs analyst Patrick Donnelly initiated coverage of Myriad Genetics with a Sell and $32 price target, implying a 22-percent downside. 

The Thesis

While acknowledging the company’s board portfolio and commercial reach, Donnelly expressed concern on the GeneSight genetic testing product cycle and said the risk-reward is “skewed to the downside."

Myriad Genetics' valuation has overstated the value of contract reimbursement revenue, the analyst said. 

Our Sell rating acknowledges MYGN’s broad portfolio and effective commercial reach as differentiating factors relative to the rest of diagnostics," Donnelly said. 

"However, we believe the market has priced in the expected stabilization of the Hereditary Cancer Testing business and valuation overstates the risk-reward from the GeneSight product cycle, where private payor reimbursement is the key lever to drive MYGN EPS growth commensurate with its 30x NTM EPS multiple."

Price Action

Myriad shares were down 6.24 percent at $38.45 at the close Monday. 

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