4 Hot Analyst Reads For Wednesday, July 25th

Bret Jensen

"Never throw the first punch. If you have to throw the second, try to make sure they don't get up for a third.” ― Brandon Sanderson, Steelheart

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Here are four small cap stocks seeing notable analyst commentary just before we open for trading this Wednesday.

Small cap Viewray (VRAY) is getting a lot of analyst support after announcing management changes this week. Late yesterday, Cantor Fitzgerald reissued their Buy rating and $13.00 price target on VRAY. B Riley FBR made the exact same call this morning with a $13.50 price target. In addition, both Mizuho Securities ($12.00 price target) and Northland Securities ($20.00 price target) assigned new Buy ratings this morning. Here is the commentary from Mizuho

We spoke with the new team and came away encouraged from our discussion. Their successful commercialization experience at Spectranetics Corp. should translate well at ViewRay. We maintain our $12 PT until we learn more details on the execution strategy. ViewRay also reported preliminary 2Q18 revenue of $16 mil that beat FactSet consensus of $12.5 mil and reiterated full-year 2018 revenue guidance of $80-$90 mil.”

Needham assigns a new Buy rating and $18.00 price target this morning for Nabriva Therapeutics (NBRV) with the following color

“Nabriva announced plans to acquire Zavante, a private company developing IV fosfomycin (Contepo) for the U.S. market. Zavante shareholders will receive 8.2M shares of NBRV stock and up to $97.5M in milestone payments (cash or shares) if certain regulatory/ commercial milestones are met. Although we have modest expectations for new IV antibiotics like Contepo in the hospital Gram- negative space, we believe the transaction is a net positive for Nabriva. No additional commercial infrastructure is needed beyond what is already planned for lefamulin. Zavante announced Phase 3 results 505(b)(2) submission is expected 4Q18. BUY. We recognize Nabriva needs cash, but believe lefamulin is a substantially underappreciated asset that will be relevant outside the challenging hospital setting.”

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H.C. Wainwright also initiated the shares as a Buy with a $20.00 price target this morning. The stock could use the support given shares trade just over the $3 level and are 52-week lows.

A different analyst at Wainwright is positive on ObsEva (OBSV). He reissues his Buy rating and $30 price target with the following commentary this morning on recent developments.

“We note that this approval came on schedule, in-line with our expectations, and that the market authorization of the first GnRH receptor antagonist should bode well for ObsEva’s lead candidate, linzagolix, which is also a member of this compound class and which is undergoing late-stage clinical testing for treatment of endometriosis and uterine fibroids. In the wake of the elagolix product approval, we reiterate our Buy rating and 12-month price target of $30.00 per share on OBSV. Orilissa pricing a pleasant surprise. We note that ObsEva management had previously guided towards the approximate cost of GnRH receptor antagonist therapy at roughly $15 per day—about $450 per month—and that the announced monthly cost of Orilissa at $845 appears to be comfortably above this level.”

JP Morgan believes the over 25% sell-off in Nevro (NVRO) yesterday on an adverse patent ruling is a 'buying opportunity'. JP Morgan reiterates their $77.00 price target and maintain their Buy rating on this name before the bell today. Here is the synopsis of Morgan's analyst view

​'The headlines suggest Boston Scientific (BSX) was the clear winner in the summary judgment, but the "nuance in the actual ruling swings this in favor of Nevro," Our interpretation is that while Boston doesn't infringe Nevro's three remaining patents with its current trials and U.S. commercialized tonic stimulation devices, the ruling implies that any attempt to actually commercialize a high-frequency device in the U.S. remains an infringement of Nevro's remaining patents '102 and '472. While Nevro's systems claims patents were ruled invalid, the company's broader method claim patents were upheld.'

And those are four small cap concerns seeing recent analyst activity before the market opens this Hump Day. Happy Hunting.

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Hot Analyst Reads