Street Calls of the Week: Pepsi may fizzle out
Investing.com — Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for Allakos, Discover Financial, and Spotify; downgrades for PepsiCo and Nike.
InvestingPro subscribers always get first dibs on market-moving rating changes.
What happened? On Monday, William Blair upgraded Allakos Inc (NASDAQ:ALLK) to Outperform. William Blair does not issue price targets.
What’s the full story? William Blair analysts expect ALLK to release top-line results from two studies of subcutaneous lirentelimab by either year-end or early 2024:
a Phase II study in atopic dermatitis (AD) and
a Phase IIb study in chronic spontaneous urticaria (CSU).
WB’s analysts noted that after a setback in the Allakos gastroenterology-focused indications with lirentelimab back in 2021, Allakos had a new chance in these dermatology indications and Allakos believed lirentelimab had a strong chance of showing efficacy in the two readouts.
The brokerage house further commented that given the current valuation with shares trading at an enterprise value (EV) of less than $100 million (while the closest comparable company Celldex (NASDAQ:CLDX) was trading at an enterprise value of $1.8 billion following its Phase II data in CSU) they see significant upside potential if proof of concept is positive in either of the upcoming Phase II studies.
Outperform at William Blair means “stock expected to outperform the broader market over the next 12 months.”
How did the stock react? Allakos shares spiked from $$3.00 to $3.16 (+5% move) in the premarket session as the headline went out. ALLK opened the regular session at $3.20 and subsequently sold off the entire day to close at $2.88, a loss of 4% since Friday’s close.
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