The shares of pharmaceutical concern Evolus Inc (NASDAQ:EOLS) are soaring this morning, after the Food and Drug Administration (FDA) late Friday approved the company's Jeuveau to treat frown lines. The regulatory body back in May declined to approve the Botox rival, but accepted a resubmitted marketing application in August. Out of the gate today, EOLS stock is up 20% to trade at $22, extending Friday's late-session rally.
Cantor Fitzgerald weighed in on EOLS, saying the FDA approval "underscores our positive investment thesis on the stock," which was named one of the brokerage firm's top ideas for 2019. Further, Cantor thinks Wall Street "may be underestimating how quick the uptake of Jeuveau could be," and reiterated an "overweight" rating and $35 price target -- nearly double the equity's close of $18.33 on Friday.
Since touching a near-term bottom of $10.22 on Dec. 24, Evolus stock has more than doubled on the charts, and on Friday topped its 200-day moving average for the first time ever. The security could now face off against the $24 level, which is double EOLS' initial public offering (IPO) price almost one year ago.
A short squeeze could help propel EOLS even higher, though. Short interest on the biotech surged 59% in the past two reporting periods, and now represents 18.4% of the equity's total available float. At the stock's average pace of trading, it would take more than a week to buy back these bearish bets.