Billionaire investor Peter Lynch once quipped this investment gem: “There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it.”
Clearly, Lynch was being sarcastic at the time. Still, the billionaire makes a good point, especially when it comes to biotech. After all, the biotech industry can lead to big spikes in stock price, or steep falls. If you “understand it” before investing, that could make a world of difference in profits.
Here, we turn to TipRanks’ powerful Stock Screener tool to choose key investment opportunities. We set filters for 1) the Healthcare sector and 2) a ‘Strong Buy’ best analyst consensus. Below, we investigate three biotech names that are backed by confident Wall Street analysts across the board.
Let’s dive right in.
California-based biotech giant BioMarin (BMRN) leads the globe in developing treatments for rare genetic diseases. However, last Thursday’s second quarter print proved to be a mixed bag for BMRN investors. Revenue surpassed expectations- but earnings underwhelmed. BioMarin shares took a close to 3% hit on Friday, but then in after-hours trading, rose right back up. What do the experts say about this drug maker?
Four-star analyst Michelle Gilson of Canaccord (Profile & Recommendations) recently got even more bullish on BioMarin, dialing her price target from $105 to $113 (14% upside potential). Gilson joined BioMarin’s bullish camp in May and praises the stock’s long-term market opportunity.
“In H2/18, we continue to see long-term value, though keep an eye on near-term competitor events,” writes Gilson. Specifically, the analyst keeps watch on rival Spark Therapeutics’ SPK-8011, a hemophilia A gene therapy.
The analyst finds BioMarin’s new treatment for phenylketonuria (PKU) to be a compelling one. BMRN has designed Palynziq, a novel enzyme therapy for adults suffering from PKU. Patients born with the rare and serious genetic disease suffer from uncontrolled blood phenylalanine concentrations. PKU causes patients to be unable to break down phenylalanine (an amino acid found in foods with protein and beverages with high-intensity sweeteners).
Looking ahead, Gilson analyst anticipates a “stronger Palynziq launch and favorable draft guidance for HemA gene therapy.”
J.P. Morgan analyst Cory Kasimov (Profile & Recommendations) also sounds off for BMRN’s bulls, lifting his target expectations; even on back of a mixed print.
The analyst reiterates an Overweight rating on BMRN and boosts the price target from $133 to $135 (36% upside potential).
“With solid commercial progress (targeting ~$2B in sales by 2020 pre potential impact of val rox and vosoritide) and major clinical catalysts on the horizon for 2019/20, we continue to have a high level of conviction in the long-term outlook for BMRN,” explains Kasimov.
BioMarin has stirred up Wall Street’s enthusiasm. The stock is considered a ‘Strong Buy’ based on recommendations from 12 best performing analysts over the last three months. With a solid return potential of 17%, the stock’s consensus target price stands at $116.73. See BMRN Price Target and Analyst Ratings Detail.
Genomic-sequencing giant Illumina (ILMN) stock has surged 12% to-date following an impressive second quarter earnings show. Just this year alone, shares have climbed 48%- and Canaccord does not see this momentum dying down any time soon.
Top analyst Mark Massaro at Canaccord (Profile & Recommendations) – ranked in the top 150 of over 4,800 analysts covered on TipRanks – rates Ilumina a Buy. Following a “massive” second quarter earnings beat, Massaro hiked his price target from $330 to $340 (5% upside potential).
Even before the earnings outclass, Massaro had asserted that “long term, ILMN looks very healthy” and “well-positioned particularly over the next 1.5 years.”
In two years, Massaro bets on Illumina tracking past $4 billion in revenues. This “market leader in the nascent next-gen sequencing market” is a “must” for a biotech investor’s portfolio. "We continue to rate Illumina as a 'top pick' and 'must own' stock for 2018,” contends the analyst.
The ‘Strong Buy’ stock has attracted a unanimous bullish consensus: 7 buy ratings in 3 months. With a return potential of 5%, the 12-month average price target rounds out to $340.14. See ILMN Price Target and Analyst Ratings Detail.
Global medical device company Cooper Companies (COO) has a quarterly report due at the end of the month- and just gained the confidence of a new Wall Street bull.
KeyBanc’s Matthew Mishan (Profile & Recommendations) just upgraded the stock from Sector Weight to Overweight with a $298 price target (14% upside potential).
A former bull, Mishan had been sidelined on COO for the last year- since July 2017. A lot can change in a year, and Mishan is jumping back on bullish board. Notably, the analyst yields an average of 33.5% in profits when betting on COO stock.
"...we have increased confidence in its current growth profile despite all the competitive noise, and it's trading at an attractive relative value historically to the peer group,” highlights Mishan.
The analyst’s renewed bullish case boils down to key three points: “1) our checks indicate increased U.S. traction, confirming revised guidance, and less concern over NT disruption from Alcon or JNJ; 2) the underlying market is healthy with available runway for LT growth and share gains; and 3) COO is making significant investments, putting it in a better position to support LT global market expansion."
The ’Strong Buy’ stock has landed 3 buy ratings in 3 months. With a solid return potential of 9%, Cooper stock’s consensus target price stands tall at $284.67. Wall Street sentiment shines with confidence here. See COO Price Target and Analyst Ratings Detail.
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This article was written by Julie Lamb.