Morgan Stanley Nearly Doubled Its Price Target on this Soaring Drug Stock

NVDA is bouncing off its 40-day moving average once again after SunTrust Robinson upped its price target

Katie Coburn
Oct 2, 2017 at 10:05 AM
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Analysts are weighing in on biopharmaceutical company Sarepta Therapeutics Inc (NASDAQ:SRPT), automotive pricing site TrueCar Inc (NASADQ:TRUE), and computer graphics company Nvidia Corporation (NASDAQ:NVDA). Here's a quick roundup of today's bullish brokerage notes on shares of SRPT, TRUE, and NVDA.

Morgan Stanley Sees Strong Drug Sales For Sarepta Therapeutics

Sarepta Therapeutics stock is up 3.7% to trade at $47.05, after the Morgan Stanley upgraded the biotech stock to "overweight" from "equal weight," and nearly doubled its price target to $60 from $33. The brokerage firm expects sales for the company's Duchenne muscular dystrophy (DMD) drug to beat estimates in the third quarter.

After hitting a 14-year high of $63.73 last September, SRPT retreated to its 200-day moving average to start 2017 near the $27 level. SRPT shares have since spent time on both sides of this trendline, but recently broke above thanks to a late-July post-earnings bull gap. Now up 65.4% year-to-date, the biotech stock is trading back near levels not seen since last October. Analysts are surely taking note, as 12 of the 14 brokerage firms following the stock rate it a "buy" or better, without a single "sell" in sight.

TrueCar Climbs Back After Upgrade

Also moving higher after an upgrade from Morgan Stanley is TrueCar stock, last seen up 0.8% at $15.91. The brokerage firm raised its rating on TRUE to "equal weight" from "underweight," citing a fairly valued risk/reward skew. The stock had been surging up the charts since early 2016, hitting a two-year high of $21.75 on July 17 of this year before falling to yesterday's close of $15.79. Still up 26.3% year-to-date, TRUE shares are now looking to find a foothold at their 200-day moving average.  

A short squeeze could help TRUE shares gain ground, as short interest accounts for 29.2% of the stock's total available float with 15.6 million shares sold short. At the equity's average daily trading volume, it would take more than three weeks to cover the shorted shares.

NVIDIA Stock Resumes Quest for Record Highs

NVIDIA stock is trading 0.7% higher at $180.13, after SunTrust Robinson decided to raise its price target on NVDA by 10.5% to $200 -- in uncharted territory. The equity has exploded in the past year, gaining 165.2%. The semiconductor stock hit a record high of $191.20 on Sept. 18, but has since retreated to its 40-day moving average, which helped NVDA shares climb higher last week.

NVDA stock hasn't disappointed premium buyers during the past year either, as evidenced by its Schaeffer's Volatility Scorecard (SVS) of 95 -- which indicates NVDA has consistently exceeded the options market's volatility expectations. What's more, now is an opportune time to buy premium, as the security's Schaeffer's Volatility Index (SVI) of 32% ranks lower than 91% of all other readings from the past year, implying that near-term options traders are pricing in relatively low volatility expectations.


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