Analyst Graig Suvannavejh from Mizuho Securities maintained a Hold rating on Cerevel Therapeutics Holdings (CERE – Research Report) and keeping the price target at $45.00.
Graig Suvannavejh has given his Hold rating due to a combination of factors that, while acknowledging positive developments, also consider broader strategic and financial considerations. Despite Cerevel Therapeutics Holdings announcing positive Phase 3 data for their Parkinson’s disease drug candidate, tavapadon, Suvannavejh interprets the drug’s potential market impact as relatively muted. He notes that the drug, although promising as an adjunctive treatment, represents only a small portion of the company’s projected revenue, with peak annual sales estimated at $532 million risk-unadjusted in the U.S. Furthermore, he suggests the recent positive trial results do not substantially alter the investment outlook for the company in light of the proposed acquisition by AbbVie.
Moreover, Suvannavejh highlights that the acquisition offer from AbbVie places an implicit ceiling on the stock’s performance, suggesting that the market has likely already priced in the positive outcomes of the TEMPO-3 study. He points out that any material change to Cerevel’s investment narrative is unlikely given the pending acquisition. This situation thus constrains the stock’s potential upside and justifies the Neutral or Hold rating, as the stock price is expected to stay around the acquisition offer price of $45. By maintaining this rating, Suvannavejh implies that investors should not expect significant share price movement in the near term and that the current valuation sufficiently reflects the company’s prospects.
CERE’s price has also changed dramatically for the past six months – from $22.710 to $42.140, which is a 85.56% increase.
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Cerevel Therapeutics Holdings (CERE) Company Description:
ARYA Sciences Acquisition Corp II is a blank check company.
