Goldman Sachs maintains Sarepta stock Buy rating, $100 target

Goldman Sachs reaffirmed its Buy rating and $100 price target for Sarepta Therapeutics after a meeting with the new FDA CBER Director, whose remarks suggested a flexible regulatory approach. This is particularly relevant to Sarepta's Duchenne muscular dystrophy drug, Elevidys, though potential risks remain for its accelerated approval in non-ambulatory patients, representing half the market. Despite strong revenue growth, Sarepta faces scrutiny due to rapid cash burn and downward earnings revisions, while analysts offer mixed opinions, with price targets ranging from $40 to $137.

Analysis

Goldman Sachs has reiterated its Buy rating and $100.00 price target for Sarepta Therapeutics (SRPT), despite the stock's precipitous 72% decline over the past six months to trade near $38. This reaffirmation follows a meeting with the new FDA CBER Director, Dr. Vinay Prasad, whose commentary suggested a regulatory approach valuing flexibility while upholding clinical integrity and respecting prior CBER leadership decisions, excluding COVID-19 matters. This stance is critical for Sarepta's Duchenne muscular dystrophy drug, Elevidys, which has full approval for ambulatory patients and saw encouraging protein expression data from its ENDEAVOR study. However, significant risk persists for Elevidys' accelerated approval in non-ambulatory patients—approximately half its potential market—due to Dr. Prasad's previous criticisms of overruling FDA staff on label expansions. Financially, Sarepta exhibits robust revenue growth of 59% over the last twelve months, yet InvestingPro data indicates rapid cash burn and analysts have revised earnings estimates downward, although the company maintains a strong current ratio of 4.02. Goldman Sachs' model indicates a potential DCF drop to $45 per share if Elevidys revenue is halved post-2027 due to unfavorable data, assuming no pipeline contribution. Sarepta projects $13 billion in free cash flow by 2030 and is advancing its pipeline, with Phase 1 data from ARWR programs expected in H2. Recent positive developments include Japanese approval for Elevidys in younger children, triggering potential milestone payments from its Roche collaboration. Analyst sentiment remains mixed: Morgan Stanley maintains an Overweight rating ($113 PT), while Evercore ISI downgraded SRPT to In Line ($50 PT) citing competitive and regulatory uncertainties, and BMO Capital Markets adjusted its PT to $120 from $160, noting a Q1 earnings miss and revised 2025 guidance. This divergence underscores the high-stakes regulatory and commercial execution pathway for Sarepta, with InvestingPro analysis suggesting potential undervaluation against analyst targets ranging from $40 to $137.

Key Decisions for Investors

• Investors should closely monitor upcoming FDA communications regarding Elevidys' potential label expansion for non-ambulatory patients, as this is a key catalyst and a significant risk factor highlighted by the new CBER Director's historical stance.
• Careful scrutiny of Sarepta's subsequent earnings reports is warranted, focusing on continued commercial uptake of Elevidys, progress in managing its rapid cash burn rate, and milestone achievements from its diversifying pipeline, particularly the ARWR programs.
• Given the stock's substantial recent depreciation and current trading levels relative to a wide range of analyst price targets ($40-$137), investors should weigh the potential for undervaluation against the considerable regulatory hurdles, competitive pressures, and execution risks inherent in Sarepta's outlook.