Exact Sciences Corporation: Initiating with Outperform
- October 3, 2019
Merger Synergies and Cologuard in Ages 45-49 to Drive Upside
Oppenheimer Analysts are initiating coverage of Exact Sciences Corporation (EXAS) with an Outperform rating and $130 price target. We expect Exact Sciences Corporation shares to outpace the market as:
- Street estimates are updated to include the economic contribution from Genomic Health Inc. (GHDX)
- Target merger synergies potentially exceed management’s target of $25M in year three
- Exact Sciences Corporation delivers on an accelerated timeline to positive cash flow from operations beginning in 2020
Oppenheimer Analysts have covered Genomic Health Inc. for over a decade and believe the franchise is positioned for sustained growth from potential introduction of in vitro diagnostic (IVD) kits for ex-US markets. Based on pro forma analysis of the merged company, our Analysts believe there could be upside to Exact Sciences Corporation’s guidance for combined 2020 revenue of $1.6B and gross profit of $1.2B.
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