Goldman Sachs Initiates Innoviva with Neutral Rating
July 22, 2022
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Goldman Sachs analyst Chris Shibutani initiated coverage of Innoviva ($NASDAQ:INVA) with a neutral rating and $16 price target on Wednesday. Shares of Innoviva fell as much as 2.4% to $14.37 in trading after the news. Shibutani believes that Innoviva’s shares are “predominantly” reflective of the value of the company’s royalty portfolio, which includes sales from GlaxoSmithKline’s respiratory drugs. He believes that the outlook for the company’s future royalty streams is “relatively uncontroversial.” It remains to be seen how Goldman’s initiation of coverage will affect Innoviva’s market and earnings in the long term.
VI Analysis
The company’s fundamentals reflect its long term potential. The below analysis on INNOVIVA is made simple by the VI app. The VI Star Chart shows that INNOVIVA is strong in asset, profitability, growth, and weak in dividend. INNOVIVA has a high health score of 8/10 considering its cashflows and debt, is capable to sustain future operations in times of crisis. INNOVIVA is classified as ‘gorilla’, a type of company that achieved stable and high revenue or earning growth due to its strong competitive advantage. At the right price, it is suitable for those who want to invest for high capital gains. High growth companies are deemed more risky as they attempt to grow faster.
Summary
They believe that the company’s royalty-based business model is attractive, but offset by execution risk associated with its late-stage pipeline and commercial products. They have a $14 price target on the stock. This may be due to investors being wary of the execution risk associated with the company’s late-stage pipeline and commercial products.
However, Goldman Sachs’ positive view of the company’s royalty-based business model may provide some support for the stock price.
