Analysts: These Healthcare Stocks Could Soar 50%

ALDR and DCPH stocks both scored new 'buy' ratings and lofty price targets

Aug 7, 2018 at 1:51 PM
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Alder Biopharmaceuticals Inc (NASDAQ:ALDR) will step into the earnings confessional after the close today. Ahead of the event, analysts at Stifel launched coverage with a "buy" rating and a $30 price target -- a premium of more than 50% to Monday's close at $19.20. Likewise, sector peer Deciphera Pharmaceuticals Inc (NASDAQ:DCPH) also scored a new "buy" rating, with Canaccord Genuity issuing a price target of $55 -- again, more than 50% above yesterday's close of $35.96.

Short Squeeze Could Push ALDR Stock Above Round-Number Resistance

Alder Biopharmaceuticals stock touched an annual high of $20 today, but has since pulled back 0.3% to trade at $19.15. The round-number $20 level previously acted as support for ALDR shares in early 2017, before switching to resistance. It's also home to a trendline connecting the stock's higher highs since January. Since the security's March lows -- stemming from an abrupt CEO departure -- Alder stock has surged 76%.

ALDR stock chart august 7

The shares jumped 5% the day after the company's May earnings report, and another strong earnings showing -- or a well-received presentation at Canaccord's healthcare conference later this week -- could spook some shorts. Short interest represents more than 20% of ALDR's total available float, and would take more than 12 sessions to buy back, at the stock's average pace of trading -- plenty of fuel for a potential short squeeze.

DCPH Stock Bounces from Key Level

Deciphera Pharmaceuticals stock is up 0.5% at $37.23, thanks to the new Canaccord rating and price target. The analyst waxed optimistic on the company's lead drug candidate, DCC-2618 -- data which sent DCPH shares soaring in early June. The company is also expected to present at the Canaccord Genuity Growth Conference this week.

Since peaking at an all-time high of $45.61 on June 18, DCPH stock has pulled back 18%. However, the stock found support in the $34 region, which is double its September 2017 initial public offering (IPO) price of $17, and represents a 59% gain year-to-date.

DCPH stock chart august 7

However, the healthcare stock is no stranger to upbeat analyst attention. In fact, seven of eight analysts already consider DCPH a "buy" or better, with the other doling out a lukewarm "hold" rating. In the same vein, the consensus 12-month price target of $56.43 represents expected upside of 51.5% to the equity's current perch, and stands in uncharted territory.

 

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