I just read Rachel McMinn's report. She's far-and-away the best analyst working on Incyte, but the report still has all the evils inherent in the medium.
11% WACC and no terminal value? Really? The explanation is that she decided on a plausible price target and tweaked the inputs to a NPV calculation to fit. Universal practice. But it only LOOKS objective. Likewise the figuring to attach a $2 value to the pancreatic cancer trial. I can throw my hands up in the air and say "whatever;" she has to pick a number and give a plausible-looking case for it. So she picks a 30% chance of an outcome that results in half of pancreatic CA patients being given ruxo in 4 years time. This is a VERY unlikely outcome. But try writing an analyst report including a perhaps 40% chance of total failure, 30% chance of modest success and 30% chance of medically significant improvement by mechanisms that apply well beyond the scope of the trial. Try to get an new job after that.
Ms McMinn is the best. Her Jakafi sales projections are better than anything management will say in public. Her price target is plausible given a 1 yr time horizon. But I trust her intuition a lot more than I trust her justifications.