Erasca initiated with an Outperform at Raymond James

Raymond James analyst Laura Prendergast initiated coverage of Erasca (ERAS) with an Outperform rating and $5 price target. Raymond James believes that the near-term commercial opportunity for naporafenib is underappreciated at the current stock price, though the firm’s investment thesis is largely based on the perceived valuation gap between Revolution Medicines’ (RVMD) RMC-6236 and Erasca’s ERAS-0015, the analyst tells investors in a research note. Revolution’s pan-RAS inhibitor is expected to have a substantial first-to- market advantage, but there is “plenty of room” for a major second mover, Raymond James argues.