Buy the Dip on These Biotech Stocks, Say Analysts

J.P. Morgan Securities is optimistic on NBIX ahead of earnings next week

by Andrea Kramer

Published on Apr 22, 2019 at 1:23 PM

Although healthcare stocks just wrapped up a brutal week amid concerns about potential policy shifts in Washington, D.C., analysts are waxing optimistic on a pair of biotech stocks today. More specifically, analysts expect Wall Street freshman Precision BioSciences Inc (NASDAQ:DTIL) to double on the charts, and they have high hopes for Neurocrine Biosciences, Inc. (NASDAQ:NBIX) ahead of earnings next week.

Analysts Set Lofty Price Targets for DTIL

DTIL stock debuted on the Nasdaq on March 28, after pricing its initial public offering (IPO) at $16 a share. The equity peaked at $19 on its first day of trading, but has moved lower in subsequent sessions, touching an all-time low of $12.13 just last Thursday, April 18. Today, Precision BioSciences stock is pacing for its best session yet, last seen 4.2% higher at $12.69.

DTIL stock chart april 22

With the security's blackout period now over, J.P. Morgan Securities and Jefferies launched coverage with "overweight" and "buy" ratings, respectively. Further, the brokerage firms' respective new price targets of $23 and $25 represent roughly two times DTIL's closing price of $12.18 on April 18. While J.P. Morgan Securities waxed optimistic on Precision Biosciences' ARCUS platform prospects, Jefferies likes the company's one-step CAR-T process.

Analysts Bullish Before Neurocrine Biosciences Earnings

Neurocrine Biosciences is slated to report earnings after the close next Monday, April 29. Ahead of the event, J.P. Morgan Securities upgraded NBIX to "overweight" from "neutral," and lifted its price target by $6 to $106. The analyst expects increased revenue from the company's Ingrezza drug, and said the stock's recent pullback -- combined with signs of a potential earnings beat on the horizon -- could point to a buying opportunity.

NBIX shares are, in fact, set to snap a six-session losing streak today, and last week plummeted 9.1% -- marking their worst week of 2019. The security has been in a channel of higher lows since bottoming at $64.72 in mid-December -- the result of a failed Tourette's drug trial -- but rebound attempts have stalled in the $92 area. At last check, NBIX was up 0.6% at $78.87.

nbix stock chart april 22

While most analysts are already bullish on NBIX -- 12 of 15 offer up "buy" or better endorsements -- the stock isn't without its skeptics. Short interest represents 4.5% of the equity's total available float, or more than a week's worth of pent-up buying demand, at the shares' average pace of trading. Should Neurocrine Biosciences beat analysts' earnings expectations next week, a short squeeze could help the equity to its next test of resistance.


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