Terns Pharmaceuticals (NASDAQ:TERN) Downgraded by Mizuho to Hold

Key Points

• Merck agreed to acquire Terns for about $6.7 billion (≈$53/share), a deal that has pushed TERN to a 52‑week high and is the primary bullish catalyst, though the transaction faces execution risk from a shareholder investigation and unusual put option activity.
• Mizuho downgraded Terns from "strong‑buy" to "hold"; analysts remain mixed but the consensus is a "Moderate Buy" with an average price target of $56.90, and several brokers have trimmed coverage, limiting upside ahead of deal closure.
• Insiders sold 170,409 shares (≈$6.56M) in the last 90 days—including CEO Amy Burroughs' sale of 71,339 shares—while institutional investors now own about 98.26% of the company after large purchases by Morgan Stanley, Adage and Vanguard.

Terns Pharmaceuticals (NASDAQ:TERN - Get Free Report) was downgraded by investment analysts at Mizuho from a "strong-buy" rating to a "hold" rating in a report issued on Friday,Zacks.com reports.

Several other analysts have also issued reports on TERN. Jefferies Financial Group restated a "buy" rating and issued a $70.00 target price on shares of Terns Pharmaceuticals in a research note on Wednesday, December 10th. Citizens Jmp downgraded Terns Pharmaceuticals from a "market outperform" rating to a "hold" rating in a research note on Thursday. Truist Financial lifted their price objective on Terns Pharmaceuticals from $35.00 to $56.00 and gave the stock a "buy" rating in a report on Tuesday, December 9th. BMO Capital Markets boosted their price objective on Terns Pharmaceuticals from $35.00 to $54.00 and gave the company an "outperform" rating in a research note on Tuesday, December 9th. Finally, Leerink Partners began coverage on shares of Terns Pharmaceuticals in a report on Monday, February 9th. They set an "outperform" rating and a $58.00 price objective on the stock. One investment analyst has rated the stock with a Strong Buy rating, eight have issued a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, Terns Pharmaceuticals currently has a consensus rating of "Moderate Buy" and an average price target of $56.90.

Terns Pharmaceuticals Trading Down 0.5%

Terns Pharmaceuticals stock opened at $52.92 on Friday. Terns Pharmaceuticals has a 12 month low of $1.87 and a 12 month high of $53.19. The business's 50 day simple moving average is $41.28 and its 200 day simple moving average is $29.06. The company has a market cap of $5.49 billion, a price-to-earnings ratio of -51.38 and a beta of -0.31.

Insiders Place Their Bets

In related news, insider Emil Kuriakose sold 1,155 shares of the stock in a transaction dated Friday, January 2nd. The stock was sold at an average price of $38.57, for a total transaction of $44,548.35. Following the sale, the insider owned 50,365 shares of the company's stock, valued at approximately $1,942,578.05. This represents a 2.24% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CEO Amy L. Burroughs sold 71,339 shares of the stock in a transaction dated Monday, January 5th. The stock was sold at an average price of $38.10, for a total transaction of $2,718,015.90. Following the completion of the sale, the chief executive officer directly owned 138,976 shares in the company, valued at approximately $5,294,985.60. The trade was a 33.92% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 170,409 shares of company stock valued at $6,563,769 over the last ninety days. Corporate insiders own 1.50% of the company's stock.

Hedge Funds Weigh In On Terns Pharmaceuticals

Hedge funds have recently bought and sold shares of the company. Morgan Stanley lifted its stake in Terns Pharmaceuticals by 4.7% in the 4th quarter. Morgan Stanley now owns 7,945,608 shares of the company's stock worth $321,003,000 after purchasing an additional 356,513 shares in the last quarter. Commodore Capital LP bought a new position in shares of Terns Pharmaceuticals in the third quarter worth $42,807,000. Adage Capital Partners GP L.L.C. increased its holdings in shares of Terns Pharmaceuticals by 40.9% in the fourth quarter. Adage Capital Partners GP L.L.C. now owns 5,550,000 shares of the company's stock worth $224,220,000 after purchasing an additional 1,611,000 shares during the period. Vanguard Group Inc. raised its position in shares of Terns Pharmaceuticals by 21.1% in the fourth quarter. Vanguard Group Inc. now owns 5,523,948 shares of the company's stock worth $223,167,000 after buying an additional 964,031 shares in the last quarter. Finally, Vestal Point Capital LP bought a new stake in Terns Pharmaceuticals during the fourth quarter valued at $181,800,000. Hedge funds and other institutional investors own 98.26% of the company's stock.

Trending Headlines about Terns Pharmaceuticals

Here are the key news stories impacting Terns Pharmaceuticals this week:

• Positive Sentiment: Merck agreed to acquire Terns for about $6.7 billion in cash, bringing a late‑stage leukemia candidate into MRK’s oncology lineup—this deal narrative is the primary bullish catalyst supporting a sharp rally toward the $53 offer price. Merck to Buy Terns for $6.7 Billion to Grow in Blood Cancers
• Positive Sentiment: Analysts and news outlets emphasize Merck’s acquisition as strategic—adding a leukemia asset as Keytruda faces patent pressure—supporting upside sentiment for TERN shares. Merck to Boost Oncology Pipeline With $6.7B Terns Buyout, Stock Up
• Positive Sentiment: Market commentary notes a possible bidding‑war dynamic after the Merck approach, which can lift the stock above the announced offer if other suitors emerge. Merck’s deal for Terns sparks debate over a possible biotech bidding war
• Positive Sentiment: Market reaction has pushed TERN to a new 52‑week high as investors price in the deal and potential takeover premium. Terns Pharmaceuticals NASDAQ: TERN Hits New 52-Week High - Still a Buy?
• Neutral Sentiment: HC Wainwright reiterated a "Neutral" rating and published FY2030 estimates and a $53.00 price target—its view aligns with the announced cash price, leaving limited analyst upside ahead of deal closure. HC Wainwright Reaffirms Neutral Rating for Terns Pharmaceuticals NASDAQ: TERN
• Negative Sentiment: Unusually large put option activity was reported (7,719 puts, a ~96% increase vs. typical put volume), suggesting some traders are hedging or positioning for downside/uncertainty around deal terms or timing.
• Negative Sentiment: A shareholder law firm (Kahn Swick & Foti) opened an investigation into the adequacy of the $53 per‑share price and the sale process, which could lead to litigation or delay and adds execution risk. Terns Pharmaceuticals Investor Alert: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Terns Pharmaceuticals, Inc. - TERN
• Negative Sentiment: Several brokers trimmed coverage or lowered stances to "Hold" (Citizens/JMP, TD Cowen), reducing near‑term buy-side reinforcement; TD Cowen’s $53 target effectively prices the deal in with little upside. Benzinga

Terns Pharmaceuticals Company Profile

Terns Pharmaceuticals, Inc is a clinical‐stage biopharmaceutical company focused on developing oral small‐molecule therapies for the treatment of chronic liver diseases and other serious conditions. The company's research and development efforts center on novel mechanisms of action designed to address the underlying causes of progressive liver disorders, including inflammation, fibrosis and metabolic dysregulation. By advancing targeted compounds that can be administered orally, Terns aims to offer patients more convenient and effective treatment options compared to injectable or biologic therapies.

The company's pipeline features several candidates in various stages of preclinical and clinical evaluation.

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