November has proven to be a prosperous month for the markets, with the S&P 500 boasting solid gains of 8.5%, contributing to a year-to-date increase of approximately 19%. As investors contemplate the future trajectory, JPMorgan’s global investment strategist, Madison Faller, provides a reassuring recommendation to remain active in the stock market. Faller points to three key factors supporting this outlook: a slight cooling in the US economy, a continued ease in inflation rates, and indications that the Federal Reserve may shift towards rate cuts early in the coming year.
Capitalizing on these positive market sentiments, JPMorgan’s stock analysts advocate a bullish approach. Highlighting two stocks with substantial upside potential over the next 12 months, both of which have earned a ‘Strong Buy’ consensus rating from Wall Street analysts, JPMorgan presents compelling investment opportunities.
Lexeo Therapeutics (LXEO)
Lexeo Therapeutics, a biotech research company in the early clinical stage, specializes in gene therapy techniques to address genetically defined cardiovascular and central nervous system diseases. Utilizing adeno-associated viruses (AAVs) as transfer agents, the company aims to deliver therapeutic genes directly into patients’ cells.
While most of Lexeo’s research pipeline is in the pre-clinical stage, two programs have progressed to human trials. LX2006, a proposed gene therapy for Friedreich’s ataxia (FA) cardiomyopathy, and LX1001, a potential Alzheimer’s disease treatment, are both in Phase 1/2 clinical trials. LX1001 has been granted Fast Track status by the FDA.
Despite being a recent entrant to the public markets through its November IPO, Lexeo’s shares have already shown promise, trading up by 24%. JPM’s Tessa Romero highlights Lexeo’s gene therapy candidates as offering a differentiated approach to genetic diseases, emphasizing the potential for upside given the company’s market cap and the continued de-risking of its candidates.
The stock holds a Strong Buy consensus rating with an average target price of $20.80, suggesting a 66% upside from the current $12.50 share price.
BioCryst Pharmaceuticals (BCRX)
BioCryst Pharmaceuticals, another biotech research firm, has achieved notable success with two approved drugs on the market. The company focuses on treating rare diseases, with its first approved drug, rapivab, addressing emergency-room influenza treatment.
Currently, BioCryst’s primary focus is on the commercialization of orladeyo, a treatment for hereditary angioedema (HAE). Orladeyo, approved in late 2020, has demonstrated success with Q3 product revenues reaching $85.7 million. Analyst Jessica Fye sees the ongoing commercialization efforts as promising, projecting net revenue growth and long-term value.
Fye’s Overweight (Buy) rating aligns with JPM’s optimistic outlook, with a target price of $10 implying an 84% upside from the current share price of $5.43. The stock maintains a Strong Buy consensus rating, with Wall Street generally bullish, featuring 9 Buys to 1 Hold and an average price target of $14.50.
In summary, both Lexeo Therapeutics and BioCryst Pharmaceuticals offer investors compelling opportunities in the biotech sector, backed by strong research pipelines and positive market dynamics.
