Bank of America Securities analyst Tazeen Ahmad reiterated a Hold rating on Rhythm Pharmaceuticals (RYTM – Research Report) yesterday and set a price target of $60.00.
Tazeen Ahmad has given his Hold rating due to a combination of factors influencing Rhythm Pharmaceuticals’ current market position. The company reported strong Imcivree sales growth for FY24, aligning with their preannouncement, and management expects this demand to continue into 2025. However, the current stock valuation already reflects the anticipated growth trajectory, which limits immediate upside potential.
Another factor contributing to the Hold rating is the upcoming pivotal data readout for the acquired HO trial expected in the second quarter. While there is optimism about achieving regulatory approval, the commercial attractiveness of the product will depend on surpassing a 5% BMI reduction, which is a higher bar given the competition from off-label treatments. Additionally, while there are promising developments in the pipeline, including next-gen MC4R agonists and other trials, these are not expected to impact the valuation significantly until later in 2025 and beyond.