Jefferies Thinks This Penny Stock Could Triple

The analyst said that risk/reward factor for MRNS is "skewed heavily toward the upside"

Digital Content Manager
Mar 5, 2019 at 12:28 PM
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The shares of Marinus Pharmaceuticals Inc (NASDAQ:MRNS) are popping today after Jefferies initiated coverage on the penny stock with a "buy" rating and a $10 target price -- nearly three times yesterday's close at $3.56. The brokerage firm believes the pharma company's Phase II postpartum depression data could spark a rally up to 50%, and said that the risk/reward factor is "skewed heavily towards the upside." As a result, MRNS stock is up 6% at $3.77 at last check. 

The stock has been in rebound mode of late -- up roughly 62% from its 16-month low of $2.36 on Dec. 21, helped along by its 30-day trendline. Now, MRNS is squaring up with its 100-day moving average, after briefly popping north of it in intraday action on Jan. 25. Plus, the equity is now gearing towards its third straight daily win and is tentatively expected to report earnings within the next week, which could spark even more volatility. 

MRNS March 5

Jefferies isn't the only analyst riding the bullish bandwagon. The brokerage bunch maintains four "strong buy" ratings on MRNS stock, compared to one "hold," and not a single "sell." Plus, the consensus 12-month price target of $16.75 is an impressive 344% premium to current levels.

Options bulls have targeted MRNS, too, with the stock sporting a 50-day call/put volume ratio of 16.49 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a ratio that sits in the 88th percentile of its annual range. This means that calls have been bought to open over puts at a much quicker clip than usual. 

In the front-month series, the March 5 call is home to peak open interest of nearly 1,800 contracts. Data from the major options exchanges confirms notable buy-to-open activity here, suggesting options traders are eyeing a breakout above $5 by expiration at the close next Friday, March 15.

 

 

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