This past week was exciting, with the Nasdaq finally surpassing its old high from March of 2000 and with the markets trying to price in the impact of a likely Greek exit from the euro. It turns out that investors still want to buy stocks on every single pullback.
24/7 Wall St. reviews dozens of analyst reports each morning to find hidden value and overlooked stocks for its readers. Some analyst reports cover stocks to buy, and of these there are often calls that go well above and beyond the traditional 15% or 20% upside projections seen in most S&P 500 stocks — and much higher than the 8% to 10% traditional upside in Dow Jones Industrial Average stocks.
This last week we tracked five key analyst calls in which the projected upside was close to 50% on the lower end and up to about 100% on the higher-end. Having such a high degree of upside of course comes with far more risk as well. Analysts are not always right, and sometimes the expected outcome simply fails to occur.
Synergy Pharmaceuticals Inc. (NASDAQ: SGYP) was the most interesting of all stocks this week among the 50% to 100% upside calls. The stock rose literally 95% from Tuesday to Friday, closing at $9.07 after having been $4.64 before the news broke. Canaccord Genuity already had a Buy rating for Synergy, but the news on its IBS and constipation treatment was strong enough for the firm to see a $2 billion long-term drug potential due to the constipation component, so Canaccord raised its target price to $19 from $11. This would have implied upside of about 144% at the time, but the rally this week now leaves an implied upside of about 110%.
A less aggressive call on Synergy was made by Cantor Fitzgerald. That firm had a Buy rating as well, and it raised its target to $14.00 from $8.50 on the news, still implying upside of 54% if this more muted call proves right.
Aerie Pharmaceuticals Inc. (NASDAQ: AERI) had a monster move last week, rallying over 50% after positive FDA news about changing its primary endpoint of Rhopressa. The FDA allowed a change in the drug trial’s primary endpoint in its eye disease study. Needham raised its rating to Buy from Hold, with a $27.00 price target. While this was not the traditional 50% from the price of $20.75, the upside call was versus a $13.27 prior close.
Aerie received an even more ambitious call later in the week. Canaccord Genuity raised its price target to $40.00. With a $20.02 closing price on Friday, that call implies a double potential. Aerie’s 52-week range is $8.84 to $35.89.
Idera Pharmaceuticals Inc. (NASDAQ: IDRA) seems very speculative for a brokerage firm like JPMorgan to come out with such a high upside, but the firm started Idera as Overweight with a $6.00 price target. This was versus a $3.57 prior close, and shares closed on Friday at $3.72. The firm is positive on Idera’s candidates being studied in Phase 1/2 proof of concept studies in its drug target for Waldenstrom’s macroglobulinemia.
Be advised that this stock has extremely limited coverage. Cowen is the only other shop with coverage on Idera, and its rating is Outperform with a $7.00 price target. Idera is a clinical stage company targeting oncology and rare diseases, and it has generated no real revenue yet.