Analysts Say Buy These 2 Pharma Stocks

Cantor Fitzgerald thinks BMRN can rally another 30%

Oct 1, 2018 at 2:48 PM
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Pharma stocks have been strong in recent months, as evidenced by the price action in the VanEck Vectors Pharmaceutical ETF (PPH). Even as outflows have totaled more than $7 million on the exchange-traded fund (ETF) since early April, per data from ETF.com, the shares have added 17% in the past six months at $64.10 -- trading near their Jan. 26 two-year high of $64.65. Analysts, meanwhile, are upbeat toward the pharmaceutical sector, with several stocks, including Teva Pharmaceutical Industries Ltd (NYSE:TEVA), BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), and Neon Therapeutics Inc (NASDAQ:NTGN), receiving bullish brokerage notes earlier today.

TEVA Stock Stays in Trading Range After Upgrade

Leerink upgraded Teva Pharmaceutical to "market perform" from "underperform," and lifted its price target by $8 to $24, citing sustainable improvements to the generic drug industry. Plus, TEVA partner Antares Pharma (ATRS) received Food and Drug Administration (FDA) approval for its injectable treatment for hypogonadism.

While TEVA stock was up 2.9% earlier, it was last seen 0.3% lower at $21.48, bringing its year-to-date gain to 13.4%. TEVA is now at risk of closing below its 120-day moving average, which supported a mid-September pullback.

teva stock daily price chart on oct 1

TEVA options traders have been betting on a breakout for shares of the Israel-based drugmaker. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 3.53 ranks in the 94th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

BMRN Stock Gets Another Bull Note Ahead of Conference

Ahead of its annual Global Healthcare Conference this week, Cantor Fitzgerald chimed in on a number of pharmaceutical stocks. For BioMarin Pharmaceutical, the brokerage firm initiated coverage with an "overweight" rating and $126 price target -- a nearly 30% premium to Friday's close -- citing "potential for significant upside" if late-stage data for Valrox and Vosoritide are positive.

Against this backdrop, BMRN shares are up 2.1% at $99.00 -- a level that coincides with a 23.6% Fibonacci retracement of the stock's surge off its April 6 year-to-date low of $75.81 to its Aug. 7 two-year high of $106.20, and has served as a magnet over the past six weeks. The equity rallied right up to the century mark earlier, which is currently home to its 50-day moving average.

bmrn stock daily price chart on oct 1

Most analysts are already upbeat toward BioMarin stock. Seventeen of 18 covering brokerages maintain a "buy" or better rating -- with not one "sell" on the books -- while the average 12-month price target of $119.67 sits in territory not charted since September 2015.

Neon Therapeutics Stock Has Struggled Since Going Public

Ladenburg Thalmann started coverage on Neon Therapeutics with a "buy" rating, echoing the upbeat outlook of the four other analysts covering the shares. In reaction, NTGN stock has shot up 26.7% to trade at $10.85.

The shares first began trading on the Nasdaq on June 27, opening right at their initial public offering (IPO) price of  $16. The equity hit an all-time peak of $16.23 that day, before closing at $15. The technical trouble has persisted, too, with Neon Therapeutics stock notching a record low of $6.17 last Tuesday. Plus, today's rally is being contained by the newly formed 50-day moving average.

ntgn stock daily price chart on oct 1

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