Piper Sandler upgrades Tempus AI stock rating on acquisition benefits

Piper Sandler raised its rating on Tempus AI Inc (NASDAQ: TEM) to Overweight from Neutral on Monday, also increasing its price target to $76 from $56. This implies a potential 20% upside from the current trading price of $63.05. Analysts have price targets ranging from $35 to $100, which reflects varying opinions on the company's $11.4 billion market valuation.

The upgrade comes after the pending acquisition of Personalis, which will provide Tempus with a unique tumor-informed MRD platform. The firm highlighted that the positive INTerpath-001 readout increases the strategic value of both companies as the leading provider of tumor sequencing for a potentially new therapeutic class. Tempus AI has shown strong growth, with a 50% revenue increase over the last year.

While 6 analysts have revised their earnings estimates upward for the upcoming period, the stock may be slightly overvalued according to the platform's Fair Value analysis. The FDA approval of the tumor-only xT CDx test is a significant milestone for Tempus, which will allow it to pursue unified ADLT pricing for xT, potentially followed by the xF product in the second half of 2027.