ACOR Stock Pops on FDA Nod

The stock is set to snap a four-day losing streak

by Lillian Currens

Published on Dec 24, 2018 at 11:32 AM

Acorda Therapeutics (NASDAQ:ACOR) shares are up 5% at $13.59 today, lifted by Friday's late-breaking news that the Food and Drug Administration (FDA) approved its new Parkinson's drug. The inhalable treatment, INBRIJA, is expected out during the first quarter of 2019. Today's rally for ACOR is pulling it out of the gutter -- the stock ended last week at 12-year lows -- and could help the shares snap their four-day losing streak. 

That losing streak and multi-year lows capped off the serious pummeling ACOR has taken since an early September sell-off in which the security lost nearly a quarter of its value in a single day. The shares have since encountered resistance at the $20-21 area. Down 36.7% year-to-date, ACOR is headed for its second-worst year on record. 

Analysts are primarily cautious, with five of eight issuing ACOR a tepid "hold" rating. However, two still see it as a "strong buy," and only one slapped it with a "strong sell." What's more, the 12-month consensus price target of $21.89 still represents a 61% premium to the stock's current levels. 

ACOR's recent slump sparked some bearish speculation, with short interest up 13.3% in the past two reporting periods. That means today's rally could be the result of a short squeeze among some of the weaker bearish hands, as short interest now represents a whopping 20.7% of the stock's available float. Plus, at ACOR's average daily trading volume, it would take almost a month to repurchase all of these bearish bets -- a catalyst for additional tailwinds should pessimism begin to unwind. 

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