Mizuho upgraded Alector Inc . (NASDAQ:ALEC) from Neutral to Outperform on Monday, raising its price target to $3.50 from $2.50, representing a 40% increase. The upgrade comes as the stock, currently trading at $1.76, has shown strong momentum with an 8.6% gain over the past week. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimates.
The upgrade comes as Alector approaches a significant milestone with upcoming Phase 3 clinical trial results for its lead drug candidate latozinemab in frontotemporal dementia (FTD), expected in the fourth quarter of 2025.
Mizuho increased its probability of success for latozinemab to 60% from 50% previously, citing recent key opinion leader feedback that was more positive than anticipated.
The research firm noted that Alector currently trades at a negative enterprise value despite having approximately $350 million in cash, with the company valued at roughly half that amount in the market.
Mizuho highlighted Alector’s cash runway extending to the second quarter of 2027 and several early-stage assets that provide additional pipeline opportunities beyond the upcoming FTD data readout.
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