The nearly 150% price pop Wave Life Sciences (WVE +1.11%) stock experienced on Monday was a hard act to follow. But the biotech's shares continued to be a hot item the following day, although that session's gain was "only" 15%. Investors continued to load up on the stock after an analyst's recommendation upgrade and several pundit price target raises.
Here come the bulls
Wave's bullish start to the week was driven by the encouraging readout of a Phase 1 clinical study of WVE-007, its obesity drug candidate. Weight-loss drugs are all the rage these days in the U.S., which has many overweight people living within its borders.
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The medicine's solid performance inspired several analysts tracking it to publish bullish updates on its developer's stock. The most bullish of all was that recommendation upgrade, enacted by RBC Capital's Luca Issi. He now feels Wave stock rates an outperform (buy, in other words), one full notch up from his previous sector perform (hold). He also tripled his price target to $27 per share from $9.
According to reports, Issi was impressed by WVE-007, which showed a quick effect on patients. The analyst also noted the weight loss it produced was comparable to that of Novo Nordisk's durably popular Wegovy, and it appears that Wave's drug is relatively easy on muscle mass.
NASDAQ: WVE
Key Data Points
Optimism incoming
Several of Issi's peers were quick to bump their price targets higher, although he was the only one upgrading his Wave recommendation.
Among the raisers was Canaccord Genuity's Whitney Ijem, who more than doubled her fair value assessment to $40 per share from $19. Wells Fargo prognosticator Ben Burnett is also clearly impressed by the company, as he lifted his price target by $13 to $29 per share.
I think this is only the start of an analyst bull stampede into Wave. WVE-007's results were compelling, and although it's still in its early stages of development, its promise already seems immense. This company is well worth watching.
