What happened
Cancer-focused biotech Novocure (NVCR 3.31%) was the focus of an analyst upgrade on Tuesday, and the stock benefited from the move. In late-session trading that day, it was up by more than 3.3% in price, in contrast to the 0.5% slump of the bellwether S&P 500 index.
So what
Novocure shareholders woke up to the pleasant news that Piper Sandler's Jason Bednar upped his recommendation on Novocure well before market open that day. Bednar has removed his previous neutral tag on the stock, replacing it with an overweight (i.e., buy) designation. His price target has been set at $45 per share, suggesting potential upside of over 62% on the shares' current level.
For obvious reasons, long-term health scourge cancer is a hot area for biotechs. The rewards that companies developing successful cancer therapies stand to earn could be enormous, which is a key reason why investors are fascinated by them.
Novocure is slated to release the results of a pivotal phase 3 study of its tumor-treating fields (TTF) technology on ovarian cancer soon. In Bednar's view, the recent "overwhelming pressure" pushing down the company's share price is unsustainable. He feels that the risk/reward of the stock makes it "simply too attractive" now to resist as an investment.
Now what
It's always wise to disseminate any piece of research on a stock you're interested in. But take care not to automatically buy or sell purely on their recommendations. Doing your own research is also crucial to getting a grip on a stock and determining whether it's ideal for your portfolio.
