Now that 2020 is well underway, investors are already moving on from just thinking about how wonderful the stock market performance was in 2019 and how wonderful stocks have been for the past decade. It is quite typical with the market at all-time highs that there are difficulties and reservations about how to place investments and assets heading into the new year and new decade. Some investors are even worried that the fourth quarter’s strength may have eaten into potential upside in the stock market for 2020. That is a very 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 more than 10% had it 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 over 10-year-old 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 pharmaceutical stocks. Even some established Big Pharma and generic drug makers sometimes see outsized upside calls from Wall Street.
Many new and reiterated bullish analyst calls already have been seen in 2020. That is also true of the biotech and pharmaceutical space. We have reviewed 20 standout biopharma analyst calls that have been made since the new year. Price targets are generally 12-month targets, and each of these were given target prices that 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 20 biotech and pharma stocks that have been given big analyst upside targets for 2020.
Aimmune Therapeutics Inc. (NASDAQ: AIMT) saw its shares trade lower on January 9 based on a positive peanut allergy data release by rival DBV Tech (see below). While a 5% drop to $32.40 seems big, there is a 52-week trading range of $16.95 to $35.48, and Wedbush Securities maintained its Outperform rating and whopping $79 target, as the lead candidate is Palforzia as a potential first and best-in-class oral immunotherapy treatment for peanut allergy. Their view is that prior Palforzia exceeded the FDA 15% minimum requirement for efficacy (at 53%) and was not as positive on the competing data.
Applied Genetic Technologies Corp. (NASDAQ: AGTC) received a very upbeat call from Wedbush on January 9. The firm noted that its Outperform rating came with a $12 price target, and while that would be nearly 200% higher than the prior $4.16 closing price, its shares were up as much as 100% at $8.35 after news that its eye disorder gene therapy handily exceeded expectations in midstage trials. The stock hit a new 52-week high of almost $8.50 on 100-times normal trading volume. The firm H.C. Wainwright had issued an even more aggressive $18 target price late in 2019. Even after doubling, this stock still had barely a $150 million market cap, and more than $71 million in cash at the end of the September quarter.
Aptose Biosciences Inc. (NASDAQ: APTO) was started with a new Buy rating and a $10 price target at Piper Jaffray on January 9. This represented well over 80% in implied upside from the prior $5.32 closing price, but shares initially rose 8% to $7.75 after the call. The 52-week range is $1.576 to $6.04, and the shares had been above the prior consensus target price for this $435 million company. Aptose closed on a $74 million capital raise (at $4.00 per share) via a stock sale in December.
Avid Bioservices Inc. (NASDAQ: CDMO) was reiterated as Buy with a $10 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.
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