On the long way down, in what appears to be a clear-cut recession, investors are looking at picking up names on the cheap for when the turnaround kicks in. While we do not necessarily know when that will be, it does not hurt to add high-quality names to the portfolio when prices are depressed. One big Wall Street name thinks it has found a high-quality stock and big winner in this gene-editing companying, with implied upside of more than 100%.
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Oppenheimer’s Jay Olson was the lead analyst on the call on CRISPR Therapeutics AG (NASDAQ: CRSP). Companies that focus on gene-based medicines have grown in popularity in recent years, and CRISPR was riding high on this wave during the pandemic but has since fallen back to pre-pandemic levels, offering a potential buying opportunity.
The chart for the stock shows that it bottomed out in mid-May and has since made a solid recovery. However, shares have been bouncing in the range of $55 to $75 since late May. At the moment, there appears to be solid support at $57 (the 50-day moving average), but it remains to be seen what will happen when CRISPR stock tests the $75 resistance (200-day moving average) in the coming trading sessions.
In terms of the actual call, Oppenheimer reiterated an Outperform rating but lowered the $150 price target to $122, implying upside of 103% from the recent closing price of $59.94.
According to Olson, CRISPR technology represents the most promising tool to achieve an ultimate functional cure for many diseases, and decision-making is more critical now when it comes to dilemmas such as prioritization of superior next-generation programs and how to optimize deployment of resources and capital. He believes that the answers may continuously evolve, depending on competitive dynamics and corresponding unmet needs. As the company is advancing over 10 in vivo programs, with a total of 30 programs, it remains to be seen how aggressively the company can continue to advance its pipeline.
CRISPR traded near $66 early Friday, in a 52-week range of $42.51 to $169.76. The consensus price target is $114.48. The stock is down about 14% year to date, but down more than 50% in the past 52 weeks.
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