Analyst Targets 325% Upside for This Under-the-Radar Drug Stock

Evercore ISI initiated coverage on Savara Inc (NASDAQ:SVRA) with an "outperform" rating and $40 price target -- representing expected upside of almost 325% to last night's close at $9.42. The analyst in coverage said under-the-radar SVRA stock creates a compelling opportunity in the small-cap biotech sphere, and waxed optimistic on the firm's lung infection treatment, Molgradex.

In reaction, SVRA stock has jumped 9.6% in electronic trading -- signaling its first foray into double-digit territory since late May. The security's 200-day moving average kept this recent rally short-lived, and could contain today's gains, too. Longer term, the shares are down 45% from their late-December annual high, though a familiar floor has emerged near $8.50, a region that cushioned a pullback in October.

Nevertheless, analysts remain upbeat toward the shares, with 100% of those in coverage maintaining a "buy" rating. Plus, the average 12-month price target sits all the way up at $25.40.

However, there is skepticism growing among traders. Short interest jumped 9.4% in the most recent reporting period to 630,000 shares While this account for just 3% of SVRA stock's available float, it would take nearly eight sessions to cover these bearish bets, at the average pace of trading.