Analysts, Options Traders Target Major Upside for CRBP Stock

Jefferies is bullish on CRBP's lead asset, lenabasum

Patrick Martin
Apr 5, 2019 at 2:37 PM
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The shares of Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) are up 11.7% to trade at $7.91, one of the best stocks on the Nasdaq today, after Jefferies initiated coverage with a "buy" rating and $18 price target. In the note, the analyst glowed about the company's lead drug lenabasum, a synthetic cannabinoid for chronic inflammation. In the wake of the news, CRBP's normally quiet options pits have perked up today.

More specifically, almost 3,400 CRBP options have changed hands today -- almost four times the expected intraday amount and five times the number of puts traded. The April 7.50 and July 10 calls are most active, and buy-to-open activity has been detected at each. It seems options traders are banking on Corbus stock to extend today's positive momentum in the coming weeks and months.

Widening the scope, long puts have been popular in recent weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows CRBP's 10-day put/call volume ratio of 0.51 ranks in the 91st percentile of its annual range. While this shows calls outweigh puts on an absolute basis, the high ratio means the rate of put buying has been accelerated.

This bearish bias is seen outside of the options pits, too. Short interest increased by 24% in the two most recent reporting periods to a record high 16.13 million shares. This represents a hefty 32% of CRBP's total available float, and 6.2 times the average daily trading volume.

On the charts, Corbus stock is heading toward its best day since Feb. 12, and has now added 35% year-to-date. And while Jefferies' price target today is more than double the equity's current perch, it's in line with the overwhelmingly bullish sentiment in the analyst community. All eight brokerages covering CRBP rate it a "buy" or better, and the consensus 12-month price target of $24.86 is a 214% premium to current trading levels.


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