Why Did BMO Capital Markets Raise Price Target For Gene Stock One Month After Initiating Coverage

BMO Capital Markets has raised the price target on Beam Therapeutics Inc BEAM to $61 from $41, with a Market Perform rating unchanged.
The model changes include updated collaboration revenues for Verve Therapeutics Inc's VERV VERVE-101 program and the incorporation of the Alpha-1 antitrypsin deficiency (AATD) program, modeled at ~$1 billion peak risk-adjusted sales in 2035E.
Related: Verve Therapeutics Amends Gene Editing Pact With Beam Therapeutics.
BMO says that the key points Beam's thesis continues to rely on:
Beam's gene editing platform is differentiated preclinically, with best-in-class potential, but clinical derisking is yet to be established.
Penetration of Beam's lead assets in the Sickle Cell Disease (SCD) market may be limited given that key competitors are ~3+ years ahead.
Diversified pipeline/partnerships can offer long-term optionality.
Related: BMO Capital Says Risk/Reward For This Gene Stock Assumes Clinical Success.
The analyst agrees that Beam's AATD and BEAM-102 programs can ultimately be commercially competitive but believe that the underlying risk due to their early stage of development doesn't allow for a high valuation.
Price Action: BEAM shares are up 5.15% at $60.59 during the market session on the last check Monday

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