Analyst Initiates Coverage On This Genetic Testing Stock With Ongoing Transformation

  • Stephens initiated coverage on Myriad Genetics Inc MYGN with an Equal-Weight rating and a price target of $22.
  • The analyst writes that the company has been at the forefront of genetic testing for decades. However, in recent years, a lack of innovation, operational issues, and competition resulted in below-market growth. 
  • In 2020, MYGN announced a transformation plan to streamline its business and accelerate organic growth to 9% - 12%. Thus far, the transformation has gone well, Stephens note.
  • Selling prices have stabilized, the OpEx margin has declined, and new products are being developed/launched. 
  • Stephens says MYGN is still in the early growth acceleration phase, thus making the analyst hesitant about the company's ability to accelerate/sustain elevated growth amid competition and without investments. 
  • Stephens says MUGN shares are cheap. If the stock can accelerate growth into the low double-digits and gain investors' confidence, even minimal multiple expansion could drive upside to shares.
  • Price Action: MYGN shares are down 1.97% at $20.41 on the last check Thursday.
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