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JPMorgan Upgrades Ophthotech: Stock Skyrockets

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Ophthotech upgraded

In the mid-cap space, one of the top performers was Intercept Pharmaceuticals (ICPT). It rose 21.5% after the FDA (U.S. Food and Drug Administration) granted accelerated approval for Ocaliva. For more information on this, please read Intercept to Present at Upcoming Investor Conferences.

The other top mid-cap performer was Ophthotech (OPHT). It rose 11.6% for the week ended June 3, 2016, and outperformed the SPDR S&P 500 ETF (SPY).

Ophthotech stock rose as JPMorgan analysts upgraded the stock to overweight with a price target of $84. Ophthotech closed at $56.82 and was trading above its 20-day moving average price of $49.10. On a year-to-date basis, the stock has fallen ~27.7%.

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Ophthotech’s relative strength index is 69, indicating that the stock is moving toward an overbought situation. However, approximately 8.8% of the total outstanding shares are in short position. Ophthotech has a book value of $0.94 per share. At its current price, the stock is trading at a price-to-book value of ~60.40x.

In the mid-cap space, Anacor Pharmaceuticals (ANAC) has a price-to-book value of 100.9x. It’s the only one that’s higher than Ophthotech. In a press release on May 31, 2016, Ophtheotech announced that on Tuesday, June 7, 2016, it will present at the Goldman Sachs 37th Annual Global Healthcare Conference in Rancho Palos Verdes, California.

Analyst recommendations and estimate

Analysts’ consensus 12-month estimated target price for Ophthotech is $86.60. That represents a ~52.4% return potential from its current price. Ten analysts are recommending a “buy” for the stock, and one has recommended a “sell.” None of the analysts recommended a “hold.” Ophthotech has a weight of ~0.4% in the iShares Nasdaq Biotechnology (IBB).

Underperformers

Ligand Pharmaceuticals (LGND) fell 3.2%, making it the most underperforming mid-cap stock for the week. The stock continued its fall on profit booking. Ligand closed at $118.07 and was trading below its 20-day moving average. However, the stock has risen 8.9% on a year-to-date basis.

Nearly 20.9% of Ligand stock is in short position. With the closing price on June 3, 2016, Ligand was trading at a 2016 forward PE (price-to-earnings) multiple of ~34.4x. It has a book value of $18.84 per share. At its current price, the stock is trading at a price-to-book value of ~6.3x. Ligand has a weight of ~0.5% in the iShares Nasdaq Biotechnology (IBB).

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