Morgan Stanley Bets on These 3 Stocks; Sees Over 40% Upside
Did the stock market’s epic rally just need a little breather? The last few weeks have seen stocks experience their first meaningful correction since the bull market kicked off in March. Now, the question swirling around the Street is, will the rally pick back up again, or is more downside on the way?According to Morgan Stanley’s chief U.S. equity strategist Mike Wilson, uncertainty regarding the presidential election and stalemate on the next stimulus package could lead to declines in September and October. “On the correction, there’s still downside as markets digest the risk of congressional gridlock on the next fiscal deal. While we think something will ultimately get done, it will likely take another few weeks to get it over the goal line,” he noted.However, Wilson argues the recent volatility in no way signals the end of the current bull market. “We think this correction is just that, a correction in a new bull market. It’s normal for markets to pullback after such an incredible run like we’ve experienced since March. Furthermore, when a new bull market coincides with a new economic cycle, the bull market usually runs for years, not months,” the strategist explained.Taking Wilson’s outlook to heart, our focus shifted to three stocks getting a thumbs up from Morgan Stanley. As the firm’s analysts see over 50% upside potential in store for each, we used TipRanks’ database to get the full scoop.Akero Therapeutics (AKRO)With its innovative medicines designed to restore metabolic balance and halt the progression of NASH, a severe form of nonalcoholic fatty liver disease, Akero Therapeutics wants to address the unmet medical needs of patients from all over the world. Based on the strength of its lead candidate, Morgan Stanley is pounding the table.Representing the firm, 5-star analyst Matthew Harrison tells clients that AKRO’s treatment for NASH, efruxifermin (EFX), has a “best-in-class profile.” EFX is the company’s lead asset and was designed to mimic the biological activity of fibroblast growth factor 21 (FGF21), which regulates multiple metabolic pathways and cellular processes, to reduce liver fat and inflammation, reverse fibrosis, increase insulin sensitivity and improve lipoproteins.According to Harrison, NASH is a complex disease, with patients usually having multiple co-morbidities like obesity, type-2 diabetes, increased triglycerides, increased LDL cholesterol and low HDL cholesterol. “A promising therapeutic solution would not only treat the multiple components of NASH but would also have an acceptable side effect profile given the potential co-morbidities,” the analyst explained.That’s where AKRO’s therapy comes in. “In June, Akero presented best-in-class data from its Phase 2a study. This data indicates that EFX improved the two liver histological endpoints recommended by the FDA along with resulting in weight loss, improving cardiovascular health (increasing good HDL cholesterol, decreasing triglycerides, not raising bad LDL cholesterol), and improving factors related to controlling blood glucose levels. This benefit/risk profile beats the competition,” Harrison stated.Looking at the indication as a whole, Harrison views NASH as a very large opportunity given that roughly 20 million people in the U.S. suffer from the condition.The analyst, however, acknowledges there are commercial hurdles. One of these is the fact that “NASH is currently undiagnosed in all but a very small percentage of the prevalent pool since diagnosis currently requires an invasive liver biopsy.” Therefore, along with demonstrating a positive benefit/risk profile, AKRO will need to find patients and secure payer support should the candidate receive FDA approval, in Harrison’s opinion.That said, Harrison believes AKRO is up for the task. “We believe that given EFX’s clean safety profile and broad-based effects, Akero will likely largely overcome these commercial hurdles,” he commented.Harrison added, “Importantly, since Akero’s treatment is injectable, we only assume the drug will penetrate into the population of the most sick patients where there are currently at least 400,000 patients diagnosed and seeking treatment in the U.S.” To this end, he assigns a 60% probability of success, and estimates unadjusted peak sales for the U.S. and the EU will land at $4.5 billion.Based on all of the above, Harrison rates AKRO an Overweight (i.e. Buy) along with a $70 price target. Should his thesis play out, a potential twelve-month gain of 93% could be in the cards. (To watch Harrison’s track record, click here)Are other analysts in agreement? They are. Only Buy ratings, 6, in fact, have been issued in the last three months. Therefore, the message is clear: AKRO is a Strong Buy. Given the $58.50 average price target, shares could rise 61% in the next year. (See AKRO stock analysis on TipRanks)TransDigm Group (TDG)Next up we have TransDigm Group, which is one of the top producers, designers and suppliers of highly engineered aerospace components, systems and subsystems. Its products are used on nearly all commercial and military aircrafts in service today. Given its ability to weather the COVID-19 storm, Morgan Stanley sees a bright future ahead.Morgan Stanley analyst Kristine Liwag stated, “We view TransDigm as the most defensible business model in commercial aerospace.” However, this is not to say the company hasn’t been confronted with serious challenges.Over the past few years, management has had to grapple with how to price its defense business, the sustainability of its pricing strategy in aerospace, the durability of its levered balance sheet and the ability to weather a downturn. That said, Liwag remains optimistic going forward. “TDG has overcome short thesis after short thesis in the past few years and we do not expect these concerns to repeat,” she noted.According to Liwag, TDG’s “ability to hold on to margins during a global pandemic” conveys its operating strength. To this end, her estimate for EBITDA margins is well above the rest of the Street’s. The analyst also points out that the company cut its SG&A expense by $89 million year-over-year in fiscal Q3 2020. “We assume the company will retain at least half of those savings, with the remainder returning in the form of variable selling expenses,” she said.Liwag added, “We are positive on TransDigm, particularly as recovery in global air traffic would be favorable for TransDigm’s core profit maker, the aftermarket. Additionally, we view it positively that TDG has the means to acquire weaker players.”Back in April, management raised $1.5 billion of additional debt to trim liquidity risks and provide an extra cushion. “A large debt load is part of management’s strategy to provide private equity like return for its shareholders. Historically, the company has used debt to acquire businesses with similar attributes to TDG’s portfolio of 90% proprietary products and 75% sole sourced. If passenger air traffic continues to normalize, we would expect TDG to use its incremental capital to acquire struggling businesses that fit its strategy,” Liwag commented.All of this prompted Liwag to leave her bullish call and $772 price target unchanged. This target conveys her confidence in TDG’s ability to climb 48% higher in the next year. (To watch Liwag’s track record, click here)Looking at the consensus breakdown, 7 Buys and 5 Holds have been published in the last three months. Therefore, TDG gets a Moderate Buy consensus rating. Based on the $500.58 average price target, shares are poised to stay range-bound for now. (See TDG stock analysis on TipRanks)Cemex SAB (CX)Cemex counts itself as one of the leading players in the building materials industry, with the company manufacturing and distributing cement, ready-mix concrete and aggregates. As its risk/reward profile has just gotten more positive, now could be the time to snap up shares, so says Morgan Stanley.Covering the stock for Morgan Stanley, analyst Nikolaj Lippmann believes that CX’s bullish guidance for the third quarter and FY20, which was significantly ahead of consensus, was “the catalyst that builds a bridge to a favorable risk-reward shift.” On top of this, the stock is trading at 6.4 2020e EV/EBITDA, which is cheap compared to its historical performance and its peers, according to the analyst.That being said, Lippmann argues “CX is mainly a good, strong deleveraging story with a call option on what could be an exceptional U.S. cement market if the U.S. Congress approves an infrastructure package in 2021… If we get a U.S. infrastructure package beyond 2020, it would add icing to the cake, we think, and take the market from good to possibly great.”Although a large multi-year package is dependent upon the outcomes of the U.S. presidential and congressional elections, even in the base case, Lippmann expects cement to show pricing power in the U.S.It should be noted that Lippmann thinks it’s possible the next year will be relatively uneventful, but in that case, he expects the industry to pause at 90% capacity utilization and grow from there. On top of this, pricing in Mexico has been holding up. This “limits the downside risk materially and helps skew the risk-reward positively,” in Lippmann’s opinion.What else is working in CX’s favor? The cement demand year-to-date has pleasantly surprised Lippmann, with upside seen during the first stage of the pandemic. He points to DIY and Department of Transportation maintenance work during periods of low traffic, and strong residential construction as the drivers of this demand.Everything that CX has going for it convinced Lippmann to rate the stock an Overweight (i.e. Buy). Along with the call, he attached a $6 price target, suggesting 50% upside potential. (To watch Lippmann’s track record, click here)Turning to the rest of the analyst community, opinions are split almost evenly. 6 Buys and 5 Holds add up to a Moderate Buy consensus rating. At $4.16, the average price target implies 4% upside potential. (See Cemex stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
ExamSoft’s remote bar exam sparks privacy and facial recognition concerns
Sometimes the light Kiana Caton is forced to use gives her a headache. On top of common concerns that come with taking a state bar exam — like whether you pass the test — Caton has to deal with challenges presented by facial recognition. She’s a Black woman, and facial recognition technology has a well-documented history of misidentifying women with melanin. Analysis by the federal government and independent research like the Gender Shades project has proved this repeatedly. The European Conference on Computer Vision also recently found algorithms don’t work as well on Black women as they do on other people.
Ok @ExamSoft support told me to “sit directly in front of a lighting source such as a lamp.” I’m receiving the same issue preventing me from completing the NY UBE mock exam. Facial recognition technology is racist. @DiplomaPriv4All do y’all think I have “adequate lighting”? pic.twitter.com/7tFdwfpyHB
— Alivardi Khan (@uhreeb) September 11, 2020
To ensure her skin tone doesn’t lead ExamSoft remote test monitoring software to raise red flags, Caton keeps a light shining directly on her face throughout the two-day process, a tactic she picked up from fellow law school graduates with dark skin.
“If someone has to shine a light in their face, they’re probably going to get a headache, or if they have sensitivity to light or are susceptible to migraines or anything like that it’s going to affect their performance, and that’s something I’m really concerned about,” Caton said.
Next week, law school graduates from 20 states — including Caton, who is in California — will simultaneously take the bar exam from remote locations using ExamSoft. In order to take part, they must surrender biometric data like an iris scan or facial scan. This appears to be the largest attempt to remotely administer state bar exams in U.S. history.
To administer the test, ExamSoft will collect and store the biometric data of a generation of legal professionals. More than 30,000 law school graduates will participate, a National Conference of Bar Examiners (NCBE) spokesperson told VentureBeat. Delays caused by COVID-19 mean job offers previously extended to law school graduates may already be past their intended start dates. For Caton and many others taking the test next week, a job offer may hang in the balance.
Security is also in question: On July 27, remote proctoring software company ProctorU was hacked, a data breach that exposed the personally identifiable information of 400,000 people. A day later, a remote Michigan state bar exam administered by ExamSoft was hit with a DDOS attack. Investigations continue into the reported ExamSoft attack.
The NCBE developed state bar exams and required all remote testing to use proctoring software. A NCBE spokesperson told VentureBeat that all jurisdictions administering the remote exam will use ExamSoft.
“I don’t understand how we can possibly be judged by these people in our own competency when it kind of seems like they need to worry about whether they can actually do this exam. It’s less than a week away now and people are having tons of issues,” Caton said. “So I’m just really concerned about this exam and I’m wondering if it’s going to go forward like it’s supposed to and whether or not I’m going to be delayed any further in starting my job.”
On top of data privacy and racial bias concerns, Caton and other bar exam applicants have to worry whether ExamSoft will answer the phone if things go wrong. Caton said her mock exam went off without a hitch, but people who took a test earlier this month in the state of New York reported long delays on hold when they called ExamSoft after they encountered issues.
As a result of the pandemic, use of AI-driven remote testing software has gone up in 2020, despite continued concerns about surveillance, biometric data collection, and bias. Each state bar association and state supreme court has dealt with uncertainty brought on by the pandemic in different ways. In Texas, legal professionals took exams in hotel rooms as monitors walked from room to room to check in on them. In the state of Washington, the bar association is waving bar exams altogether. Concern with racial discrimination, tech issues, and historically disruptive wildfires led deans of 15 major California law schools to request the state supreme court make the bar exam an open book test.
After ExamSoft was chosen to administer the test in California, the ACLU shared its opposition to the use of remote testing software that uses facial recognition. In a letter to the California Supreme Court, the organization argued that these conditions have the potential to exacerbate historical inequity in the legal profession at a time of historic inequity. [can we avoid historical/historic? Maybe the second could be: pervasive/systematic]
“Given the invasive and discriminatory nature of facial recognition technology, the proposed use of software that collects biometric data for the administration of the bar examination would be antithetical to the State Bar’s mission of protecting the public and increasing access and inclusion in the legal system,” the letter reads. “In an unprecedented moment that requires innovative, equitable pathways to attorney licensure due to the myriad challenges posed by COVID-19 and the ongoing movement for racial justice, the deployment of facial recognition threatens to further entrench racial and economic inequities that have long created barriers to the legal profession.”
Any facial recognition flags raised while a person is taking a bar exam will not halt a test, an ExamSoft spokesperson told VentureBeat. But because facial recognition tech is less likely to recognize Kiana Caton, it may result in more misidentification red flags and more human reviewers to assess her exam. Similar issues were reported with other exam software like Proctorio. ExamSoft declined to share the name of the company that created the facial recognition technology currently used in ExamSoft.
State Bar of California interim executive director Donna Hershkowitz responded to the ACLU letter last week. Espousing a commitment to an inclusive legal profession, she said any facial recognition issues flagged by the software will be analyzed by four human reviewers, part of a series of steps that she believes will eliminate facial recognition bias issues.
In addition to issues with facial recognition technology, a participant leaving the frame of view at any time or the occurrence of sounds — including the sounds of voices — can also trigger ExamSoft flags that require a human to review a bar exam. Nearby sounds could prove a potentially common problem, particularly as the pandemic has kept many households working and schooling from home. A survey of Maryland bar exam applicants shared with VentureBeat found that more than 40% lack access to a quiet place where they can take the bar exam without interruption.
The Electronic Frontier Foundation (EFF) raised concerns about the perpetuation of inequity in a letter to the California Supreme Court last month. Additionally, the EFF expressed concerns about California Consumer Privacy Protection Act (CCPA) violations and warned that the State Bar of California is making data collected by ExamSoft alluring to hackers.
“It is well known that storing large collections of private or personally identifiable information (PII) creates the risk of a security breach, and ExamSoft’s retention of data is no different,” the EFF letter reads.
As a way to further reduce risk, the State Bar of California requested that ExamSoft delete all biometric data associated with the test after human reviewers have sifted through instances flagged by predictive AI.
Exactly when State Bar of California officials will order ExamSoft to delete biometric data it gathers while administering the test is unclear, but it could be at least a few months after the test. In a letter sent Friday, California Supreme Court clerk and executive officer Jorge Navarrete said the State Bar of California has 60 day to submit a timetable for when ExamSoft will delete all collected biometric data.
In a separate discrimination matter related to the California bar exam, some recent law school graduates have filed lawsuits against the NCBE and State Bar of California alleging state and federal disability law violations. People with disabilities have been told they must take the test in person at designated testing locations. In response, State Bar of California interim executive director Donna Hershkowitz said in a statement shared with VentureBeat that appropriate COVID-19 safety measures will be taken for in-person administration of the test for people with disabilities and declared that “there is no unlawful discrimination of the October bar examination.”
ExamSoft hack in Michigan
Concerns about privacy and other issues are not without precedent. On July 28, about an hour into the bar exam in the state of Michigan, some test takers experienced login issues. In a statement shared on Twitter later that day, ExamSoft said its login process was targeted by a distributed denial of service (DDOS) attack. In the statement, the company said this marked the first time ExamSoft had experienced a DDOS attack on the network level and that no data was compromised during the attack.
The State Bar of Michigan and ExamSoft emphasized that all bar exam applicants were able to complete the exam that day and that the Michigan Board of Law Examiners allotted extra time to test takers impacted by login delays.
A day after, Michigan Supreme Court Chief Justice Bridget McCormack ordered an inquiry into the login issues experienced by some Michigan test takers. Results of that investigation are still outstanding, a Michigan Supreme Court spokesperson told VentureBeat. About a week after the incident, ExamSoft asked the Department of Homeland Security and FBI to open investigations. ExamSoft and its network provider have put additional redundancies in place to make sure the same kinds of delays don’t happen again, a company spokesperson told VentureBeat in an email.
Despite ExamSoft’s assurances, law school graduates continue to express security concerns. More than 50 state bar applicants taking the test next week in Pennsylvania requested a fraud investigation earlier this month, claiming they experienced an uptick in compromised passwords after ExamSoft downloads.
Under the guidance of the NCBE, ExamSoft will administer all remote October bar exams, but not every remote test monitoring software company was interested in participating. Speaking with American Bar Association for a recent article, ExamSoft cofounder and current Extegrity CEO Greg Sarab said his company, one of three that backed out of remote proctoring services for state bar exams because he feels it’s risky to use the technology at this point, as evidenced by inconsistent performance in mock and live tests. Sarab also expressed concern about risks related to reliable internet connections and lack of time for companies like ExamSoft to test their technology.
Diploma privilege, provisional licensing, and supervised practice
In an attempt to address unprecedented logistical challenges and keep the legal profession moving forward during the pandemic, state bar associations are even beginning to consider ways law school graduates can practice law with temporary licenses or do away with bar exams entirely.
In California, for example, the bar exam passing grade was permanently lowered in July from 1440 to 1390. And last week, the State Bar of California Board of Trustees approved a provisional license agreement that will allow law school graduates to practice law until 2022 without taking the bar exam. The Board also directed its provisional licensing working group to consider whether to recommend admitting these individuals to the state bar if they complete a set number of hours of supervised practice as a provisionally licensed lawyer.
Kiana Caton said she can’t imagine that any job offer with a rate of pay promised to a licensed lawyer will be given to a provisionally licensed attorney.
“It’s basically a glorified internship or something,” Caton said about provisional licensing. “So, I’ve never understood the purpose. I don’t think that my opinion is anything novel or unusual. I think a lot of people have the same question.”
The District of Columbia Court of Appeals took a different approach and adopted a supervised practice program last week, which allows graduates of accredited universities to receive a license to practice law if they work under the supervision of a more senior attorney for three years.
Diploma privilege means people can get a license to practice law without taking the bar exam so long as they meet certain requirements like graduating from an American Bar Association accredited law school. This spring as state bar associations began to delay tests or implement remote testing options, groups like United for Diploma Privilege and Diploma Privilege for Maryland were created to encourage more state bars to adopt diploma privilege particularly to ensure access for groups like low income applicants and people with disabilities. This year, states like Washington, Utah, and Louisiana, have adopted diploma privilege.
As testing and licensing boards grapple with the need to administer certification tests during the pandemic, the logistical and privacy hurdles law school graduates are encountering are also impacting professionals workers across multiple industries. In some instances, engineers have had to drive across state lines to complete a certification test. Others still have had to choose whether to stay home or risk their lives and go to an in-person certification that could lead to higher wages or opportunities during an economic recession.
In the pandemic, remote learning has revealed how some students can get left behind and how issues like lack of broadband access or the digital divide impact their education. Remote test monitoring software using facial recognition and debates around how lawyers get licenses also reveal inequality issues as well as surveillance and data privacy challenges for a generation of legal professionals.
Kiana Caton said she’s proud of this generation of legal professionals for speaking out, but wonders why more politicians or bar certified lawyers aren’t speaking up on their behalf. Being a bar exam applicant in the current environment, she said, can give law school graduates the impression that the legal community isn’t interested in protecting them in some grey area; because they’re not quite lawyers and can no longer be considered members of the general public.
“I can’t quite wrap my head around how this could possibly be the state of things right now, and it’s a little concerning also that we haven’t had too many attorneys or legislators standing up for us,” she said. “It feels like we’re being treated like we’re expendable, like our rights and our data and privacy are expendable, and so I think that’s where we’re at right now.”
College student wakes to armed police raiding dorm in false report, Texas family says
The family of a Texas university student wants answers after she woke up in her dorm to campus police drawing guns on her.
Two weeks after the Sept. 14 incident at Stephen F. Austin University, the school’s president and police chief says it is investigating the false report made on Christin Evans.
Her roommates and seven other girls falsely accused Christin, 17, of threatening to stab someone with scissors, she said, according to KHOU. The students told a resident advisor about the fake threat and police were notified, KPRC reported.
Police raided the student’s dorm at 3 a.m. with guns drawn, her parents said, according to KTRK.
“I cant sleep at night because of this. It has made me really paranoid,” Christin said in a press conference.
Her parents say text messages they received from the university’s police chief said surveillance footage proved Christin is innocent, KPRC reported.
The family believes she was a victim of swatting, KHOU reported. Swatting occurs when people play a prank on a person that leads police to believe a crime is taking place.
Christin, who is Black, may have been targeted because of her race, according to her parents, KTRK reported.
“This could have been a Breonna Taylor circumstance,” the family’s attorney, Randall Kallinen, said at the press conference, referring to a Black woman killed earlier this year by Louisville police.
Christin’s mom, LaShondra Evans, said Monday she wants justice, KTRK reported. “I want the people responsible to have consequences. They played with her life,” the mother said.
Stephen F. Austin President Dr. Scott Gordon said in a statement Monday filing a false report is a violation of the law and has directed a thorough investigation.
“Each perpetrator will be dealt with appropriately,” he stated. “My heart goes out to the young lady who was an innocent victim in this matter. We will do all we can to support her and her family through this heinous ordeal.”
John Fields, the chief of the university’s police department, said the incident involves “a racially diverse group of students” who he added will be held accountable.
Christin is still enrolled at the university but has moved out of the dorm, KHOU reported.
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Oppenheimer: These 2 Stocks Are Poised to Surge by Over 100%
When it comes to the market’s wild swings, is the glass half empty or half full? Oppenheimer’s chief investment strategist John Stoltzfus is taking the latter view.Despite the volatility that has ruled the market over the last few weeks, Stoltzfus actually likes what he’s witnessing in both the market and the economy. In particular, he points to U.S. companies that have been outperforming most other markets around the world as exciting plays, with the innovation in the U.S. reflecting a key component of his bullish thesis.“The U.S. is outperforming most of the markets around the world — whether it’s developed markets or emerging markets… We’ve taken out the froth that had come into the market in certain [mega cap] names. It may be a good opportunity to pick up some really good, high quality growth stories that are on sale right now,” Stoltzfus noted.Additionally, the strategist believes the S&P 500 could climb back to its September 2 high point, based on improving economic data. The approval of a COVID-19 vaccine as well as an election outcome that is “friendly to the domestic economy, business, job growth and the taxpayer” could also push the index higher.Turning Stoltzfus’ outlook into tangible recommendations, Oppenheimer analysts are pounding the table on two stocks, with these pros seeing over 100% upside potential in store. Running the tickers through TipRanks’ database, we wanted to find out exactly what makes them so compelling.Brickell Biotech (BBI)Focused on the development of innovative and differentiated therapeutics for the treatment of skin diseases, Brickell Biotech wants to improve the lives of patients everywhere. Given the potential of the company’s lead candidate and its $0.82 share price, Oppenheimer thinks that now is the time to pull the trigger.Sofpironium bromide (SB), a prescription treatment for axillary hyperhidrosis (AH, or excessive underarm sweating), is entering U.S. Phase 3 trials. This program will consist of two identical six-week studies, and will evaluate its ability to improve the condition per the objective (gravimetric sweat production) and subjective (HDSM-Ax) co-primary endpoints. Each is expected to last 12 months, and the first will kick off next quarter.Roughly 10 million people in the U.S. suffer from AH, with this condition interfering with daily social and professional activities. Currently, only 2.3 million receive prescription treatment, and some resort to invasive or permanent interventions like Botox, MiraDry or surgery.Oppenheimer’s Leland Gershell argues that more conservative approaches could be used to meet these medical needs. He also believes the recent entry of Eli Lilly’s competing product, Qbrexza, represents a significant step forward. That said, there’s “room for improvement” with this anti-cholinergic approach.Looking at a U.S. Phase 2b trial, the highest dose of BBI’s SB gel (15%) demonstrated 46% greater sweat reduction per gravimetric analysis compared to the placebo, with significant reductions in a validated patient-reported outcome instrument seen at all doses. Based on the trial data, efficacy is over 50% better than Qbrexza per label, despite higher baseline severity. In addition, their safety profiles were relatively similar.It should be noted that BBI will market the drug to U.S. dermatologists through a specialty salesforce of 120 representatives. According to Gershell’s estimates, uptake by 110,000 patients per year (just 5% of the currently treated AH population) translates to $200 million in gross sales. The analyst adds that patent issuance could extend market exclusivity to 2040.Adding to the good news, on September 25, BBI announced that Kaken Pharmaceutical, its development partner, got the green light to manufacture SB in Japan for the treatment of AH. Japan is the first country to approve the candidate, with the launch expected later this year.To sum it all up, Gershell stated, “By virtue of its efficacy, tolerability, and antiperspirant-like application, we believe SB offers an attractive profile in a market that offers much room for improved solutions. We encourage risk-tolerant investors to build a position ahead of upcoming newsflow.”To this end, Gershell rates BBI an Outperform (i.e. Buy) along with a $5 price target. This target conveys the analyst’s confidence in BBI’s ability to surge 502% from current levels. (To watch Gershell’s track record, click here)Looking at the consensus breakdown, 2 Buys and no Holds or Sells have been published in the last three months. As a result, BBI gets a Moderate Buy consensus rating. The $5 average price target is identical to Gershell’s. (See BBI stock analysis on TipRanks)Aldeyra Therapeutics (ALDX)As for Oppenheimer’s other pick, Aldeyra Therapeutics works to bring new treatment options for immune-related diseases to market. Based on the solid progress of its pipeline, the firm has high hopes for this healthcare name.Representing Oppenheimer, analyst Justin Kim points out that he came away from a recent conversation with the CEO even more confident in ALDX’s long-term growth prospects. Pivotal studies on reactive aldehyde species (RASP) are slated for Q4 2020, evaluating the action of reproxalap, Aldeyra’s lead therapy designed to clamp down on overactive inflammation, on tear levels of RASP over a period ranging from 1-2 days to 28 days. “Based on Phase 2a results, we are confident in the ability to replicate results in Q4 2020,” Kim stated.Given the potential of dry eye disease (DED) in the near-term, the analyst expects significant investor focus to land on clinical trial execution (Phase 3 RASP studies and safety study), which would support a potential NDA filing by the end of 2021, in Kim’s opinion. “Despite some volatility in the shares, we see a solid setup emerging as the company initiates its Phase 3 RASP studies in dry eye disease (DED),” he said.Speaking to the potential of RASP as an accepted dry eye endpoint, ALDX has experienced “a watershed moment,” with it facilitating an expedited path to registration (from traditional sign endpoints) and greater likelihood of clinical trial success, based on reproxalap’s mechanism of action (MoA) as a RASP-trap, according to Kim.He added, “Moreover, agreement on RASP could have broader implications for a commercial launch in dry eye, a market that we believe will see segmentation as more therapies with targeted MoAs become incorporated into the armamentarium.”“We continue to be impressed by the progress in achieving a potential concurrent filing for dry eye and allergic conjunctivitis (AC), appreciating the importance of a differentiated dry eye agent with action also in AC. As the dry eye therapeutic landscape increases its options, we expect greater segmentation of the heterogeneous patient population potentially beginning with reproxalap’s positioning in ‘allergic dry eye’,” the analyst concluded. For the rest of 2020, focus is likely to stay on Phase 3 study designs (assay work/development), execution and the potential readout in DED, which could set the stage for a commercial launch in DED and AC in 2022.If that wasn’t enough, based on the broader pipeline of candidates targeting PVR, inflammatory conditions and COVID-19, Kim sees “a rich environment of catalysts for the shares over the coming 12-18 months.”It should come as no surprise, then, that Kim stayed with the bulls. To this end, he kept an Outperform rating and $15 price target on the stock. Investors could be pocketing a gain of 110%, should this target be met in the twelve months ahead. (To watch Kim’s track record, click here)What does the rest of the Street have to say? Only Buy ratings, 2 to be exact, have been issued in the last three months. So, the consensus rating is a Moderate Buy. In addition, the $23.50 average price target suggests 227% upside potential from current levels. (See ALDX stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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