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Exact Sciences Corporation: Initiating with Outperform

  • Oppenheimer & Co. Inc.
  • 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: 

  1. Street estimates are updated to include the economic contribution from Genomic Health Inc. (GHDX)
  2. Target merger synergies potentially exceed management’s target of $25M in year three
  3. Exact Sciences Corporation delivers on an accelerated timeline to positive cash flow from operations beginning in 2020
Merger Synergies

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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