4 Hot Analyst Reads For Monday, July 9th

Bret Jensen

How much I missed, simply because I was afraid of missing it.” ― Paulo Coelho, Brida

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The market will try to build on last week's big gains in the biotech sector. Here are four small cap stocks seeing notable analyst commentary just before we before market open this Monday.

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From the better late than never Department.....Citigroup downgradesArsanis (ASNS) this morning to Neutral from a Buy and reduces its price target from $27 to $4. Citi's analyst believes "will most likely trade near cash for the coming months. There could be upside if further analysis of the Phase 2 results reveals encouraging subgroup data, but the likelihood of this is small". This small cap stock cratered late in June after announcing that is was discontinuing its primary drug candidate which was targeting treatment for pneumonia in high-risk, mechanically ventilated patients after determining that a Phase 2 trial was not likely to meet its primary endpoint.

On a more positive note, Oppenheimer is assigning a new Outperform rating on Kura Oncology (KURA) this morning and raising their price target from $27 to $35 citing an increased average forward price-to-sales multiple of the biotechnology sector. This is the first analyst activity on this stock in two months since Cowen & Co. reiterated a Buy rating on May 9th.

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Small cap Sesen Bio (SESN) gets a big 'shout out' from Canaccord Genuity today which initiates the shares a New Buy with a $5 price target. Canaccord's analyst believes its primary drug candidate could see peak sales of just over $300 million by 2025. To put in perspective, the stock currently trades just under $2.00 a share with an approximately market capitalization of $150 million. On May 22nd, H.C. Wainwright raised their price target on this name from $2 to $3.50 as well. Look for this stock to be a mover in trading today.

Finally, Jefferies reissues their Buy rating and $54 price target on Reata Pharmaceuticals (RETA) before the opening bell. Jefferie's analyst recommends "buying shares ahead of the Phase II Alport retained benefit analysis results, which should be announced the next few days or weeks. The analyst believes bardoxolonecan succeed. If the Phase II retained benefit analysis is successful, it will de-risk the ongoing Phase III as well as ADPKD and other rare kidney indications the company is pursuing, On a positive announcement the analyst sees 15% to 20% of share upside as well as longer-term stock appreciation."

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We like and own this name as well and believe these studies for bardoxolonecan will be positive as well.

And those are four small and mid cap concerns seeing recent analyst activity here to start the new trading week. Happy Hunting.

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Hot Analyst Reads