Tesla Stock Soars After Analysts Say Buy the Dip

An FDA ruling may have put ECYT's prostrate cancer treatment on a quicker path to approval

Sep 10, 2018 at 2:51 PM
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The U.S. stock market is mixed this afternoon, with blue chips lagging. Among individual names making big moves are electric carmaker Tesla Inc (NASDAQ:TSLA), cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM), and cancer treatment specialist Endocyte, Inc. (NASDAQ:ECYT). Here's a quick roundup of what's moving shares of TSLA, AKAM, and ECYT.

Tesla Headlines Fuel Upside for Car Stock

Another day, another onslaught of Tesla headlines. For starters, in a note entitled, "Tesla, Inc.: Buy Even With Drama in LBC," Baird named TSLA stock a "fresh pick" and maintained its "outperform" rating, saying the company's Gigafactory "creates a significant barrier for competition and manufacturing capability should be a competitive advantage for TSLA over the long term."

Elsewhere, Bernstein said previous drops below $300 have marked attractive entry points for bullish traders, and sees the "near-term risk-reward for Tesla as relatively skewed to the upside, given the potential for the stock to revert towards the middle of its $270 to $370 range." On the flip side, Needham reiterated its bearish view on TSLA, explaining, "We are concerned with this level of employee turnover, especially at these key levels of management."

Along those lines, reports surfaced last Friday, Sept. 7, that TSLA CEO Elon Musk had told staff he has promoted Jerome Guillen to head the company's automotive unit following his previous stint running Tesla's truck program. Against this busy backdrop, the equity is trading up 6% at $279.15 -- but given Tesla stock's sharp losses recently, its 14-day Relative Strength Index (RSI) closed Friday at 27. In other words, the security was oversold coming into today's trading, meaning a short-term bounce was likely in the cards.

Akamai Technologies Stock Overdue for More Upgrades

Akamai Technologies stock is 3% higher at $76.75, after D.A. Davidson upgraded the tech name to "buy" from "neutral," and lifted its price target to $93 from $80 -- a 25% premium to last Friday's close, and territory not charted since July 2000. Today's positive price action is just more of the same for a stock that's up 66.8% year-over-year, with a recent pullback from its late-June 18-year high of $83.08 quickly contained by AKAM's rising 180-day moving average.

There's room for more analysts to raise their ratings on AKAM, should this outperformance continue. Ahead of today's trading, half of the 14 brokerages covering the shares maintained a lukewarm "hold" rating. Plus, the average 12-month price target of $83.95 is a slim 9.3% premium to current trading levels.

Endocyte Stock Pops on Positive FDA Ruling

Endocyte shares have surged 9.7% to trade at $18.60 on news the Food and Drug Administration (FDA) approved an alternative main goal for the drugmaker's late-stage study of its prostate cancer treatment, PSMA-617 -- allowing the company to seek marketing approval sooner than expected. Price-target hikes to $25 at Wedbush and Jefferies are adding to the bullish buzz, with ECYT stock on track for its biggest one-day gain since July 5.

More broadly speaking, ECYT stock has turned in a standout performance already in 2018, up 335% so far. Plus, the shares topped out at a four-year high of $20.85 on Sept. 4, before pulling back to a successful test of their 40-day moving average -- a trendline that's served as steady support since late February.

Continued short covering could fuel additional upside for Endocyte stock. While short interest fell 11% in the most recent reporting period, there are still 6.65 million ECYT shares sold short -- representing 15.6% of the equity's available float, or 10.9 times the average daily pace of trading.


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