Lead
TD Cowen has opened formal coverage of GRAIL, Inc. (NASDAQ: GRAL), assigning a Hold rating and establishing a price target of $114.00, which equates to roughly an 11% upside relative to the then-current share price of $102.28. The initiation reflects a cautiously constructive view: the firm recognizes the upside potential in GRAIL's technology and market positioning but cites valuation and catalyst visibility as reasons for restraint.
Diligence and clinical view
According to TD Cowen, its initiation rested on an array of diligence activities - including calls with key opinion leaders, targeted surveys, and reviews of the scientific literature. Those inputs led the analyst team to a favorable assessment of the multi-cancer early detection opportunity and to support for GRAIL's first-mover status in the space. The firm also described the Galleri test and its clinical evidence as high quality.
"We initiate on GRAL with a Hold rating and $114 PT. Our extensive diligence (KOL calls, surveys, literature reviews) supports a favorable view of the MCED opportunity, GRAL's first mover position, and the quality of its Galleri test & clinical evidence."
Revenue, margins and profitability outlook
The company reported $141.83 million in revenue with 20.53% growth, figures TD Cowen referenced in its note. However, InvestingPro data highlighted by the analyst shows a weak gross profit margin of -47.53%. TD Cowen's initiation does not foresee near-term profitability for the company; consensus analyst estimates cited an EPS forecast of -$8.11 for fiscal year 2025.
Catalysts and regulatory expectations
TD Cowen expects the NHS-Galleri study to produce a positive readout in the upcoming summer timeframe, assigning a 75% probability to a favorable outcome and using a 15% stage shift as its base case. The firm also anticipates eventual U.S. Food and Drug Administration approval but models a narrower label than the broad pan-50 cancer indication GRAIL is pursuing.
Valuation and recent stock performance
The initiation note highlights that GRAL's shares had risen more than 450% since January 25 and were trading at the highest multiple among diagnostics companies at the time of the report. InvestingPro data cited in the coverage indicates a 225.53% price return over the prior six months and an InvestingPro Fair Value analysis that places the company as significantly overvalued at a roughly $3.99 billion market capitalization. TD Cowen explicitly stated it would require stronger conviction in the company’s catalyst pathway, a more attractive valuation, or higher confidence in the commercial ramp and penetration prospects to adopt a more positive stance.
Other analyst activity and company performance
GRAIL released preliminary fourth-quarter and full-year 2025 results that exceeded analyst estimates and FactSet consensus, a performance the firm said was driven in part by a 35% year-over-year increase in Galleri testing volume. In parallel, Canaccord Genuity reiterated a Buy rating on the shares with a $105 price target, while Baird started coverage with an Outperform rating, a $113 price target and a Speculative Risk designation. TD Cowen’s Hold contrasts with those more bullish positions, underscoring divergence among brokerages on valuation and risk.
Context and implications
TD Cowen’s initiation frames the tension between promising clinical data and commercial momentum on one hand, and current market pricing and profitability challenges on the other. The firm’s line of inquiry and its stated thresholds for becoming more constructive make clear the specific areas of uncertainty it wants to see resolved: catalyst clarity, valuation compression, or stronger evidence of a robust commercial ramp and market penetration.
Conclusion
In sum, TD Cowen’s Hold initiation represents a balanced assessment: acknowledgement of Galleri’s clinical profile and first-mover advantages, paired with caution about the company’s negative gross margin, unprofitable outlook, and the possibility that any regulatory approval could carry a narrower label than the company seeks. Investors and market participants will likely watch the NHS-Galleri readout and the company’s commercial uptake closely as key determinants for a re-rating.