Grail's (GRAL) innovative approach positions its as a first-mover in the $100 billion total addressable market for multi-cancer early detection, but challenges include navigating complex regulatory pathways, proving clinical utility, and securing reimbursement, Morgan Stanley said in a note Wednesday.
Medicare coverage and regulatory clearances are long-term catalysts with the UK's National Health Service readout expected in H1 2026 and the US Food and Drug Administration approval likely in H1 2027, according to the note.
"While our discounted cash flow analysis can support a higher valuation of $50 longer term... we view the stock as fairly valued and likely to be range-bound in the interim with these key catalysts at least 12 to 18 months away," the firm added.
Morgan Stanley said that Grail's Galleri benefits from brand-building and market leadership opportunities as the first MCED to market, while also bearing the burden of educating stakeholders, building clinical evidence, and paving the way for reimbursement.
The brokerage initiated the coverage of Grail with an equal weight rating and a price target of $16.
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