Drug Data Sends Arrowhead Pharmaceuticals Stock to Multi-Year High

Short sellers are getting crushed by ARWR stock

by Josh Selway

Published on Sep 6, 2018 at 10:18 AM
Updated on Jun 24, 2020 at 10:16 AM

Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) is trading up 43.4% this morning, last seen at $20.22, thanks to positive clinical data for the company's hepatitis B treatment. The stock hit its highest point since early 2014 out of the gate, peaking at $20.80, with an upgrade from B. Riley also providing tailwinds. The brokerage firm lifted its rating on ARWR shares to "buy" from "neutral," and moved its price target up to $19 from $18.

This outperformance is just more of the same from the equity, which came into 2018 trading below $4 per share, meaning it's added over 400% this year. However, the stock's massive rally up the charts has drawn the attention of short sellers, with the number of shorted shares soaring higher throughout the year. In just the last two reporting periods, short interest rose 12.3%, and as it stands now it'd take these bears two weeks to cover their bets -- a large number that indicates the potential for a short squeeze going forward.

This skepticism certainly isn't seen from analysts, even prior to B. Riley's bull note this morning. Of the six brokerage firms in coverage, five of them say Arrowhead Pharmaceuticals is a "strong buy." However, the shares have blown past their average 12-month price target of $16.25, suggesting some analysts may need to upwardly revise their price targets.

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