BTIG ups Exact Sciences to buy; PT $60

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BTIG upgraded Exact Sciences (NASDAQ:EXAS) to “buy” from “neutral” with a price target of $60, citing an approximate 35% drop in the stock price since November, which it said offers an “attractive entry point.” The stock closed at $38.80 on April 2.

Exact is a molecular diagnostics company with an initial focus on the early detection and prevention of colorectal cancer.

“We have always felt Cologuard should replace most colonoscopies over time and should increase the number of people screening,” writes analyst Dr. Sean Lavin.

He outlined a number of issues that have concerned investors but said they have been priced into the stock price. “Outside of a volatile market, we see little additional risk and expect shares to rally from here as adoption grows towards standard of care,” he added.

Dr. Lavin also noted that spending is increasing and 2018 expenses have no guidance. “While we do not consider this bad news, some investors were surprised by the size of the sales force growth and many would prefer year-long guidance,” he said.

“This likely pressured shares and while there is some risk expenses could grow faster than investors like, it does increase the likelihood each quarter of meeting or exceeding revenue estimates,” he added.

Stephen Kilmer