Analyst Targets 300% Upside for This Drug Stock

H.C. Wainwright also placed a "buy" rating on OTLK

Jul 18, 2019 at 9:30 AM
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H.C. Wainwright initiated coverage on Outlook Therapeutics Inc (NASDAQ:OTLK) with a "buy" rating and an $8 price target -- a 310% premium to last night's close. The brokerage firm said it expects the company to receive regulatory approval by 2022 for its drug candidate ONS-5010, which is currently being tested in late-stage trials to treat patients with wet age-related macular degeneration (wet AMD) and other retina diseases.

In reaction, OTLK stock is up 15.4% at $2.25, headed toward its best day since June 14, when it surged 20.8%. Nevertheless, the shares are still down 44% year-to-date, and have surrendered 69% since hitting an annual high of $10.96 on Feb. 14. Plus, Outlook Therapeutics has failed to fill a mid-April bear gap near $3 -- a level that quickly contained a late-May rally attempt.

Analysts are overwhelmingly upbeat toward the drug stock, though, with 100% in coverage maintaining a "buy" or better. Additionally, the average 12-month price target of $7.50 sits in territory not charted since early April.

Short sellers, on the other hand, have been actively betting against the stock. There are currently 1.4 million OTLK shares sold short, which represents a significant 20% of the equity's available float. This could be amplifying today's upside, as some of the weaker bearish hands rush to cover.

 

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