After a solid 2019 has seen mixed trading in 2020, and after a massive run over the last decade, many investors are still trying to decide where and how they want their assets positioned in their portfolio. Some investors grew worried that the fourth quarter’s strength may have eaten into potential upside in the stock market this year. That is a natural concern, and frankly should never be ignored. That said, the 28%-plus gain of 2019 in the S&P 500 would have only been a gain of more than 10% had the gain been tallied from late in 2018 before the worst fourth-quarter performance took the markets lower than they should have gone.
24/7 Wall St. tracks dozens of analyst calls each day of the week, and this turns into hundreds of analyst calls over the course of a week. Some analyst calls come with Buy ratings and the traditional Buy and Outperform ratings are generally seeing upside calls of 8% to 10% at this stage of the 10-year-plus bull market. One area of the market that can see much greater upside opportunities, which also implies a greater risk, is the biotech and emerging pharma stocks. Even some established Big Pharma and generic drug makers sometimes see outsized upside calls from Wall Street.
There have been many new and reiterated bullish analyst calls that have already been seen in 2020. That is also true of the biotech and pharmaceutical space. We have reviewed 11 standout biopharma analyst calls that have been made in the four trading days so far of the new year. Price targets are generally 12-month targets and each of these were given target prices which were either above consensus or were offering much larger implied gains than traditional analyst calls in that 8% to 10% range. Additional trading or call summary data have been provided on each.
There are always issues to consider with analyst calls, so please read our analyst guidance disclosure below before blindly using analyst calls as a basis for investing or trading.
Here are 11 biotech and pharma stocks that have been given big analyst upside targets for 2020.
Avid Bioservices Inc. (NASDAQ: CDMO) was reiterated as Buy with a $10.00 price target at Janney on January 6. The latest price was $6.95, implying 44% upside if its analysis is correct. Avid Bio has a mere $414 million market cap, but Janney was seeing an increased strategic value in 2020 as a pure-play monoclonal producer that is still a small-cap stock competing with larger companies at a time when the global capacity for biologics manufacturing remains constrained. The firm also sees an inflection point to faster growth and profitability coming in 2020.
Endo International PLC (NASDAQ: ENDP) was raised to Overweight from Neutral and its target price was raised to $7.00 from $5.00 at Piper Jaffray on January 3. Endo recently traded at $4.60, implying more than 52% upside if the firm is correct. Endo is a $1 billion market cap stock that recently launched a generic version of Afinitor tablets in the United States via its Par Pharma unit. The company’s news release from December indicated that the name brand dug saw approximately $412 million ins ales over the last four quarters.
IGM Biosciences Inc. (NASDAQ: IGMS), a $1 billion market cap company that is into research and development of engineered therapeutic engineered Immunoglobulin M (IgM) antibodies, was recently reiterated as Overweight at Piper Jaffray on January 6. What stood out here was that the $26.00 target price was raised all the way up to $53.00. That represents about 60% upside from the recent $32.95 share price. IGM Bio has a 52-week range of $16.10 to $57.42.
Illumina, Inc. (NASDAQ: ILMN), which is the leader in gene sequencing and genomics, was started as Buy with a $385 target price in a new sector call at Citigroup. Illumina recently traded at $329 for an implied upside of 17% if the Citigroup call is correct. This was one of the more bull targets in that sector call, and some of the peer companies were viewed as Hold/Neutral positions rather than with big buy ratings and big implied upside.