Truist Securities lowers Exelixis stock price target to $49 on mixed results

Exelixis (NASDAQ:EXEL) reported mixed Q2 2025 results, with EPS exceeding expectations but total revenue and flagship Cabometyx sales ($520M) falling short of analyst estimates, leading Truist Securities to lower its price target to $49 from $56. The sales miss was attributed to unspecified headwinds and the discontinuation of a Phase 2 trial, despite strong commercial volume growth. While JMP Securities reiterated its $50 price target, Stifel raised its target to $41, reflecting a mixed yet generally optimistic analyst outlook for the biopharmaceutical company, which some analyses suggest is undervalued.

Analysis

Exelixis (EXEL) presented a mixed operational and financial update for its second quarter of 2025, leading to divergent analyst revisions. The company achieved a notable earnings per share of $0.75, surpassing the consensus estimate of $0.64, but fell short on revenue, reporting $568 million against an anticipated $578.46 million. This revenue miss was primarily driven by lower-than-expected sales of its flagship product, Cabometyx, which generated $520 million, missing both Wall Street's $530 million and Truist's $558 million forecasts. Despite strong underlying commercial volume growth of 18% year-over-year, the sales performance was dampened by new pricing dynamics and other unspecified headwinds. Compounding the commercial challenges, Exelixis announced the discontinuation of its Phase 2 STELLAR-305 trial, prompting Truist to remove the potential head and neck cancer indication from its valuation model and reduce its price target to $49.00 from $56.00, though it maintained a Buy rating. In contrast, JMP Securities reiterated its Market Outperform rating and a $50.00 price target, emphasizing the strong volume growth, while Stifel raised its target to $41.00 on an improved outlook for zanzalintinib in colorectal cancer. The company's strong fundamentals, evidenced by a Piotroski Score of 9, provide a solid backdrop to these near-term operational uncertainties.

Key Decisions for Investors

• Investors should weigh the positive signal of the Q2 earnings beat and 18% YoY volume growth against the negative catalysts of the top-line revenue miss and evident pricing pressure on Cabometyx.
• The discontinuation of the STELLAR-305 trial elevates pipeline risk; therefore, closely monitor clinical data from other programs, particularly for zanzalintinib in metastatic colorectal cancer, which underpins recent analyst optimism.
• Given the conflicting operational data and divergent analyst price targets ranging from $41 to $50, it is prudent to assess the stock's valuation in the context of its strong reported fundamentals and the market's reaction to near-term sales guidance.
• Consider the opposing analyst views, with Truist and JMP maintaining bullish ratings based on long-term potential and volume, while Stifel's Hold rating suggests caution may be warranted until there is more clarity on sales trajectory and pipeline success.