Goldman Adds EXACT Sciences To Americas Conviction List

EXACT Sciences Corporation EXAS shares have risen over 50 percent year-to-date, and Goldman Sachs sees further upside ahead.  

The Analyst

Patrick Donnelly maintained a Buy rating on Exact Sciences shares with a $120 price target.

The Thesis

Goldman previously upgraded Exact Sciences Feb. 26, calling it a "must-own" growth stock.

The recent competitive data presented at the American Association for Cancer Research annual meeting served as a clearing event ahead of first-quarter results and fiscal 2019 guidance, rendering the setup for EXACT Sciences attractive, Donnelly said in a Friday note.

The analyst added the company to Goldman's Americas Conviction List.

Donnelly predicated his bullish thesis on the molecular diagnostics company on the following three factors:

Cologuard, the non-invasive colon cancer screening option provided by the company, is a unique growth story offering significant scarcity value.
The company has multiple levers to accelerate its topline growth in the near-to-medium term.
The optionality from pipeline products is underappreciated.

Investors are likely bracing for a healthy Cologuard beat in the first quarter relative to the guidance of 315,000 at the midpoint, the analyst said. 

"While we acknowledge EXAS valuation is demanding, we feel the path to revenue upside is the key driver of the stock and mitigates the risk of a multiple re-rate lower." 

The Price Action

Exact Sciences shares were up 0.43 percent at $94.12 at the time of publication Friday. 

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Photo courtesy of Exact Sciences.