There are different ways to assess whether it’s time to lean heavily into a certain class of stocks, and according to Oppenheimer’s head of Technical Analysis Ari H. Wald, the charts right now are pointing toward a resurgence in growth.
“Recent points of market discussion have included incremental cracks in value and concurrent relative strength in growth,” Wald noted. “Breaking down the components and their influence on the market, we see growth in a stronger position to the lead the S&P 500 higher than we do value’s current condition to drag it lower.”
Furthermore, adds Wald, relative strength in growth aside, the analyst believes it’s not out of the question that cyclical value has become “tactically attractive vs. defensive value too.”
“These are reasons we think the weight of the market evidence argues for higher highs over the coming months,” Wald went on to add.
Meanwhile, against this backdrop, Wald’s analyst colleagues at Oppenheimer have been busy finding the stocks that are primed for some serious growth; they have clocked an opportunity in two names they see generating gains of over 100% upside from current levels.
Do these choices chime well with other Street experts? Let’s take a closer look.
ORIC Pharmaceuticals (ORIC)
Investors on the lookout for triple-digit gains will often head to the biotech space. ORIC Pharmaceuticals is a clinical-stage biopharma focused on discovering and developing cancer treatments. In fact, its moniker stands for Overcoming Resistance In Cancer.
As with any clinical-stage biotech, it’s the pipeline that matters and ORIC currently has three drugs undergoing Phase 1b trials; ORIC-533 for multiple myeloma, ORIC-114 for EGFR/HER2-mutated cancers, and ORIC-944 for prostate cancer patients. Dosing for all three trials began last year and a data readout from all is anticipated sometime during the second half of the year.
The catalysts ahead offer a turnaround for ORIC. The shares were under pressure last year after the a company announced the development of its experimental cancer drug ORIC-101 was being discontinued.
With all 3 current programs piquing the interest of Oppenheimer’s Matthew Biegler, the analyst believes it’s time for investors to “reacquaint” themselves with ORIC.
“Now is the time things could get interesting,” Biegler says. “We view ORIC as an investment in a differentiated pipeline of early-stage oncology assets, backed by a strong leadership team with a prior history of successfully developing clinically important cancer drugs… ORIC’s pipeline is differentiated and well-diversified, yet the stock currently trades below cash—which we believe essentially gives investors free options on each of ORIC’s novel Phase 1 assets.”
Biegler is bullish indeed. Based on the above, the analyst rates ORIC an Outperform (i.e. Buy) while his $14 price target suggests the shares will climb 179% higher in the year ahead. (To watch Biegler’s track record, click here)
Wall Street’s analysts can be a contentious lot – but when they agree on a stock, it’s a positive sign for investors to take note. That’s the case here, as all of the recent reviews on ORIC are Buys, making the consensus rating a unanimous Strong Buy. The analysts have given an average price target of $15, slightly more bullish than Biegler’s above, and indicating ~200% upside from the current share price of $5.01. (See ORIC stock forecast)
CalciMedica, Inc. (CALC)
We’ll stay in the biotech space for the next Oppenheimer pick. CalciMedica is a newly formed entity, the result of a recent merger between CalciMedica and Graybug Vision.
The company focuses on the discovery and development of small molecule drugs intended to treat severe and chronic inflammatory diseases and autoimmune disorders – specifically those with high unmet need. This it does by developing inhibitors of CRAC (Calcium release-activated channels) channels. For the uninitiated, calcium is a key regulator of numerous biological processes, and activation of the CRAC channel affects a number of these processes, including inflammation, vascular permeability, and cell death.
Its lead product candidate is Auxora, earmarked as a therapy for life-threatening inflammatory conditions such as acute pancreatitis, respiratory failure, and acute kidney injury.
Auxora is currently being tested in clinical studies with catalysts on the horizon. Topline results from the ongoing Phase 2b clinical study (CARPO) in AP (acute pancreatitis) patients with systemic inflammatory response syndrome (SIRS) are anticipated in 4Q23 and later this year, the company will also announce results from the ongoing Phase 1/2 clinical study (CRSPA) in pediatric patients who develop AAP (asparaginase-associated pancreatis) given toxicity from treatment with asparaginase for their underlying ALL (acute lymphoblastic leukemia).
Oppenheimer analyst Leland Gershell has high hopes for this promising biotech and outlines the bull-case for Auxora.
“Auxora exerts potent anti-inflammatory and organ-protective activity through CRAC channel blockade, and has demonstrated an efficacy signal in severe COVID-19 pneumonia and acute pancreatitis (AP),” Gershell explained. “We’re optimistic for Phase 2b success in the latter 4Q23, and a Phase 1/2 in pancreatitis that frequently results from leukemia treatment could pave the way toward accelerated approval and a monetizable priority review voucher (PRV).”
“We believe Auxora has $400M sales potential in AP alone, an indication that presents little foreseeable competition. We expect Auxora’s development progress to drive outperformance in 2023 and beyond,” the analyst added.
To this end, Gershell rates CALC an Outperform (i.e. Buy), backed by a $14 price target. If that’s the right price tag, it would mean that the stock could surge 180% from current levels. (To watch Gershell’s track record, click here)
Some stocks fly under Wall Street’s radar and CALC appears to be one such name right now. Currently, Gershell’s review is the sole one on record. (See CALC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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