Wall Street believes 3 stocks will skyrocket 50% or more in 2021
Wall Street analysts are not always right. It is important to recognize this from the start. However, they are paid a lot of money to examine all the details they can find about a given company in order to formulate an educated estimate of its stock performance.
Sometimes analysts come out indifferent. Other times, they are optimistic about the potential of a stock. And in a few cases, they are absolutely stunned by the potential gains that a stock could offer. This last category is particularly worth seeing. Here are three stocks that Wall Street says will skyrocket 50% or more in 2021.
The average price target of analysts for Amarin (NASDAQ: AMRN) reflects a 58% premium over the current price of the biotechnology stocks. Some on Wall Street believe Amarin has nowhere to go, having plunged 77% last year.
The uptrend may seem somewhat surprising. The company lost an extremely important lawsuit in September. The United States Court of Appeals for the Federal Circuit upheld a U.S. district court ruling in favor of two companies seeking to manufacture generic versions of Vascepa d’Amarin.
So what might analysts be thinking? On the one hand, they know that Amarin doesn’t just throw in the towel. The company sued Hikma Pharmaceuticals for patent infringement in November after the UK-based drugmaker launched a generic version of Vascepa. If Amarin wins this litigation, it could dramatically change the outlook for the company.
Moreover, the Wall Street gurus know that Amarin still has a clear path so far to market Vascepa outside of the United States without generic competition. In addition, the anticipated mitigation of the COVID-19 pandemic could allow the company to promote the drug even further, thereby increasing sales.
2.blue bird bio
Analysts are placing even more emphasis on the outlook for organic blue bird (NASDAQ: BLUE). The average price target for the stock is a whopping 71% above its current level. Like Amarin, however, Bluebird has a lot of ground to catch up. Its shares fell 50% in 2020.
There are three main reasons behind the drop in the Bluebird stock. First, the United States Food and Drug Administration (FDA) has given the green light to the multiple myeloma candidate ide-cel. Second, Bluebird issued more shares to raise funds, thereby diluting the value of existing shares. Third, biotechnology has delayed its filing with the FDA for approval of LentiGlobin for the treatment of sickle cell disease for at least a year to resolve manufacturing issues.
However, Wall Street analysts likely see these as temporary challenges. Bluebird partner, Bristol Myers Squibb (NYSE: BMY), resubmitted for FDA approval for ide-cel in July 2020 and awaits an approval decision in March of this year. Bluebird is also making progress with its LentiGlobin program.
Biotechnology’s decision to split of its oncology activity into a separate unit has caused some headache among analysts, but Bluebird believes the move will provide a much needed catalyst.
3. Nektar Therapeutics
You might notice a trend here. Our third stock that Wall Street analysts like a lot is also a biotech stock. The average price target for Nektar Therapeutics (NASDAQ: NKTR) reflects a premium of over 80% above its current price. As was the case with Amarin and Bluebird, Nektar’s shares fell last year, although its 21% drop was not as severe as the declines of the other two stocks.
It’s not hard to see why analysts expect better days for Nektar. The company and its partner Bristol Myers Squibb have five different pivotal late stage studies underway for a combination of bempegaldesleukin and Opdivo targeting multiple types of cancer.
Nektar also has another great partner. it works with Eli lilly to conduct phase 2 clinical studies evaluating NKTR-358 in the treatment of lupus and ulcerative colitis. The companies are also evaluating the investigational drug in early stage studies targeting atopic dermatitis and psoriasis.
Can Nektar really skyrocket 80% or more in the next 12 months? It remains to be seen. However, not too long ago (July 2019), the stock was trading above analysts’ current average price target. The good news from his pipeline may well allow Nektar to make a comeback.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.