Deutsche Bank weighed in with fresh "buy" endorsements
Analysts at Deutsche Bank weighed in on several biotech stocks this morning, including Deciphera Pharmaceuticals Inc (NASDAQ:DCPH) and Sutro Biopharma Inc (NASDAQ:STRO). The brokerage firm initiated coverage of both DCPH and STRO stocks with a "buy" rating, and their new respective price targets of $42 and $22 suggest the analysts think the equities could double.
Deciphera shares are up 2.2% to trade at $21.01. After breaking out to the upside to trade as high as $26.91 in late June, DCPH stock took a turn for the worse, barreling right through former support in the $22 area. The shares yesterday closed at $20.55 -- their lowest close of 2019, and not far from the equity's year-to-date breakeven.
Despite the stock's struggles in July, most analysts are already in the bulls' corner. DCPH sports six "strong buy" recommendations, compared to one "strong sell." In addition, the consensus 12-month price target of $47.80 represents a premium of 127% to current levels.
On the other hand, short sellers remain prominent. Short interest accounts for 23.5% of the security's total available float, or nearly 17 sessions of trading, at DCPH's average daily volume.
Sutro Biopharma stock, meanwhile, is up 5.9% at $11.68. The company priced its initial public offering (IPO) at $15 a share back in September, and STRO peaked at $15.90 on its first day of trading. In 2019, however, the stock's rally attempts have run into a wall in the $12-$12.50 neighborhood, and the equity has spent the past couple of months bouncing along support in the $11 area.
Again, most analysts are already fans of STRO. The consensus 12-month price target of $26.20 represents expected upside of 124% to current levels, and stands in uncharted territory for the stock. Plus, all four analysts following STRO consider it worthy of a "buy" or better rating.