Drug Stock Eyes 8th Straight Gain on Cancer Study Win

J.P. Morgan Securities thinks WWE stock is a buy

by Karee Venema

Published on Nov 30, 2018 at 2:33 PM

The U.S. stock market is trading modestly lower as the G-20 summit gets underway. There's some volatile price action among individual stocks, including media name World Wrestling Entertainment, Inc. (NYSE:WWE), immune disorder specialist Fate Therapeutics Inc (NASDAQ:FATE), and golf retailer Callaway Golf Co (NYSE:ELY). Here's a quick look at what's moving the shares of WWE, FATE, and ELY.

Analyst Says It's Time to Buy WWE Stock

J.P. Morgan Securities upgraded World Wrestling Entertainment to "overweight" from "neutral," and raised its price target to $87 from $84 -- a 20.7% premium to last night's close. The brokerage firm said WWE's domestic content is "significantly underpriced," and called concerns about live attendance "overstated."

The equity plunged more than 40% from its Sept. 29 record high of $97.69 to its Nov. 20 five-month low of $58.50. WWE shares found support at their 200-day moving average, and are now set for their highest close since Oct. 25, up 146.4% year-to-date.

Most analysts are already bullish toward World Wrestling shares, with the majority maintaining a "buy" or better rating. Plus, the average 12-month price target arrives at $88.60, a nearly 18% premium to WWE's current price.

FDA Approves Clinical Trials for Fate Therapeutics' Combo Cancer Treatment

The Food and Drug Administration (FDA) gave the green light for Fate Therapeutics to begin clinical trials for its experimental cancer immunotherapy, which, in combination with checkpoint inhibitor therapy, targets advanced solid tumors. In reaction, FATE stock is up 13% to trade at $15.94, closing in on its Oct. 1 record high of $16.94.

Plus, the shares are on track for an eighth straight win, which would mark their longest daily win streak since February 2017. FATE has put in a strong performance over the long term, too, with its 40-week moving average helping guide the equity to a 264% year-over-year gain.

Short sellers are likely feeling the heat, too, with 7.14 million shares dedicated to these bearish bets -- a record high. As such, a short squeeze could be underway, and considering it would take more than two weeks for shorts to cover, at the average pace of trading, there's plenty of sideline cash to help fuel a bigger rally.

M&A Buzz Puts Callaway Golf at Risk of Bear Notes

The shares of Callaway Golf have plummeted 13.4% to trade at $16.37 -- slicing through their rising 320-day trendline and flirting with their biggest one-day loss since April 27, 2012 -- on news the golf company is buying German-based outdoor apparel maker Jack Wolfskin for roughly $476 million. Today's plunge just exacerbates the equity's recent technical troubles, with ELY stock down more than 33% from its late-September 17-year peak at $24.67.

There's certainly room for analysts to downwardly revise their outlooks, should ELY share continue to struggle. While eight of 11 covering brokerages maintain a "strong buy" recommendation, the average 12-month price target of $25.35 is a 54% premium to current trading levels.

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