Dog Dermatitis Study Gives Struggling KIN Stock a Boost

Despite hitting new lows last week, the brokerage bunch is still incredibly bullish on KIN

Deputy Editor
Jul 29, 2019 at 9:58 AM
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Veterinary stock Kindred Biosciences Inc (NASDAQ:KIN) is higher today, after the company announced positive results from a pilot study of KIND-016, used to treat atopic dermatitis in dogs. The equity is eyeing its fourth straight win today, up 8.5% at $7.29, and earnings are just around the corner. 

The stock's surge comes just days after hitting a two-year low of $5.96 on July 23. From a longer-term standpoint, KIN's 80-day moving average has acted as resistance in 2019, ushering the shares to a year-to-date loss of roughly 38%. Now, however, KIN is set to close atop its 10-day moving average for the first time in nearly a month, pacing for its best day since October. 

Despite KIN's struggles in 2019, analysts have been incredibly bullish on KIN, with five calling it a "strong buy," compared to only one analyst saying "hold." What's more, the stock's lofty consensus 12-month target price of $14.81 hasn't been touched since last November, and is more than double the equity's current price. 

Short sellers, on the other hand, have been upping the bearish ante, with short interest up 19.1% in the last two reporting periods. And while the the 1.09 million shares sold short represent only 4% of the stock's available float, it would take more than six days to buy back all these bearish bets, at KIN's average pace of trading.

As alluded to earlier, Kindred Biosciences is slated to report earnings after the close on Thursday, Aug. 1. The stock has averaged a one-day swing of 4.3% after its last eight earnings, regardless of direction, and jumped 3.3% after earnings in May.

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