While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Celldex Therapeutics (NASDAQ:CLDX) popped 10% today after Leerink Swann raised its price target on the stock by a whopping 60%.
So what: Leerink maintained its "outperform" rating on Celldex, but a new price target of $45 per share (from $28) implies a valuation of more than $1 billion and represents 55% worth of upside to Friday's closing price. Analyst Howard Liang believes that Celldex's experimental cancer immunotherapy, CDX-1127, has huge potential as a co-stimulatory agonist, but given the fact that there's still no human data on the drug, Fools shouldn't read too much into the call.
Now what: Celldex expects to report its first phase 1 patient data in early November.
"As a combination partner for immune checkpoint inhibitors such as anti-PD-1 agents, we believe the efficacy bar is not high based on our analysis of early clinical data on other IO agents, and we believe any demonstration of single-agent activity coupled with a clean safety profile could position CDX-1127 as one of the leading candidates for PD-1 combination," Liang wrote in a note to clients.
Of course, when you consider just how far CDX-1127 still has to go, the risk/reward trade-off on Celldex shares -- which have already run 380% over the past year -- might be as attractive as Leerink would have you believe.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.