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Morning Market Musings: September 1st

Sep. 01, 2020 9:02 AM ETFRLN, IDYA, MYOK, TGTX6 Comments
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Golf is a lot of walking, broken up by disappointment and bad arithmetic."- Author Unknown

Note: Going forward the Biotech Analyst Run Down will be called the Morning Market Musings.

Today is the first trading day of September.  August was one to remember for investors, especially those in mega cap stocks.  The S&P 500 enjoyed its best August since 1986 after advancing some seven percent on big gains from the likes of Apple (OTC:APPL) and Tesla Motors (TSLA).  its gain over the five months off the late March meltdown lows now tallies 35%.  The best five month stretch for the index since 1938.  If there ever was a phase that confirms the phrase 'Don't Fight the Fed' this might be it.

Unfortunately, breadth of this rally has been relatively narrow over the past few weeks as growth stocks have easily outperformed value stocks and large stocks have crushed small cap ones for the most part.  Hopefully, breadth improves in September.

As we get ready for a new month of trading, pre-market futures are pointing to a flattish opening.

The Latest Post From The Biotech Maven

While we await the opening bell, here are four small healthcare plays that analyst firms like this Tuesday.

JP Morgan initiates oncology concern TG Therapeutics (TGTX) as a new Overweight with a $38 price target this morning.  Morgan's analyst states

The company's lead candidate umbralisib, either alone or combined with propriety CD20 antibody ublituximab, represents differentiated therapy in the hematologic B-cell malignancies space. The analyst sees "compelling" commercial potential in the indolent non-Hodgkin lymphoma and chronic lymphocytic leukemia populations."

Data Point:

Democratic states that maintained stricter and longer lockdowns appear to be recovering more slowly. But even they are raking in more cash than they let on.  Take California, which ended its fiscal year in June with $3.2 billion (2.6%) more revenue than its May budget forecast. Its July revenues beat estimates by 5.6% due to much better than expected individual tax payments. Credit the rebound in equities and the boom in tech stocks, which have lifted capital gains. 

Freeline Therapeutics (FRLN), which came public earlier this month, getting the usual post-IPO follow up from analyst firms today.  Wedbush ($28 price target), JP Morgan ($27 price target) and Morgan Stanley ($28 price target) all initiate the shares as a Buy today.  Here is the view from Stanley's analyst.

Freeline's lead program is for hemophilia B and the company's FLT180a candidate has "best-in-class potential". Clinical success in hemophilia B can "set up Freeline for success in additional programs in multi-billion-dollar markets'"

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MyoKardia (MYOK) is seeing some positive analyst action to start the week.  Today, Cantor Fitzgerald is reiterating its Buy rating and Street high $188 price target on MYOK.  Yesterday, both BMO Capital ($148 price target) and Credit Suisse ($136 price target) did the same.

Factoid of the Day:

New York July jobless figures out last week: 15.9 percent statewide, 20 percent (one of five workers) in New York City. In The Bronx, 25 percent were jobless, a rate last seen during the Great Depression. New York’s numbers are far worse than those for the nation, which saw only 10.2 percent of employees off the job.  Even the 22,000 planned municipal layoffs will leave the city with 9,000 more workers than when de Blasio took office. 

Finally, we have IDEAYA Biosciences (IDYA).  It is maintained as a Buy with a $28 price target at Northland Securities.  Both Oppenheimer ($25 price target) and H.C. Wainwright ($22 price target) took the same action on this stock in mid-August.

And those are four small cap concerns getting the 'thumbs up' from the analyst community this Tuesday morning.

When your shot has to carry over a water hazard, you can either hit one more club or two more balls." - Henry Beard

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