Morgan Stanley: These 2 ‘Strong Buy’ Stocks Could Double From Here
JTwo months ago, Morgan Stanley posed a question: “Will September’s market slump take longer than average to recover?” According to the firm’s chief US equity strategist, Mike Wilson, we can “fast forward to today, and the answer to that question is definitely no.” Instead, our data shows that retail investors are staying true to their commitment to buy stocks…”
Wilson sees retail investors giving a big boost to the current bullish momentum in the market and, paradoxically, he thinks the prospect of tough times is motivating them. According to Wilson, retail investors are turning to equities as a defensive measure, recognizing that in the current economic environment of rising inflation and low interest rates, high-yield stocks offer some degree of portfolio protection. of investment.
With that in mind, we wanted to take a closer look at two stocks that just received approval from Morgan Stanley, with the company predicting more than 100% upside potential for each. Using TipRanks’ database, we discovered that the rest of the high street is also on board as both achieved a consensus “Strong Buy” rating.
Taysha Gene Therapies (TSHA)
We’ll start with a Texas-based biopharmaceutical company, Taysha Gene Therapies. This company focuses on the development of new treatments for monogenic diseases of the central nervous system (CNS). The company has an active pipeline, comprising 26 adeno-associated viral therapies. These viruses are native to humans and other primates and are used to deliver therapeutic agents – modified genes – directly to affected cells in the patient’s body. Three of Taysha’s pipeline candidates are in clinical trials, while the others are in preclinical stages of development.
Among the drug candidates in clinical trials, the leader is TSHA-120. Earlier this year, the company released visual acuity data from Phase 1/2 trials of TSHA-120 for GAN (giant axonal neuropathy, a genetic CNS disorder that manifests in early childhood). The company expects to receive regulatory guidance before further testing before the end of this year.
TSHA-101, which the company announced in September this year had received orphan drug designation from the European Commission, is also entering phase 1/2 clinical trials. TSHA-101 is a treatment for childhood GM2 gangliosidosis, another CNS disease of infancy – but which leads to early death, at age 4.
In another recent update, the company’s Angelman Syndrome (AS) program was the subject of a recent data release. The company has released positive proof-of-concept preclinical data supporting its approach to treating AS, a CNS disorder that can cause severe physical and mental disabilities from early childhood. The company is targeting UBE3A gene replacement therapy as a treatment for this disorder. Taysha is expected to begin studies for the IND early next year, ahead of human clinical trials.
Taysha’s active pipeline caught the eye of Morgan Stanley’s Matthew Harrison. The analyst believes that “Taysha’s clinically validated gene therapy approach and a robust and rapidly evolving pipeline with multiple catalysts to come, pave the way for the upside.”
How many benefits? Harrison assigns TSHA an overweight (i.e. buy) position, and his $39 price target implies solid 140% year-over-year upside potential for the stock. (To see Harrison’s track record, Click here)
“We are Taysha Overweight and believe that her broad AAV9 gene therapy platform, supported by management expertise in the field, has the potential to benefit patients with genetic disorders characterized by high unmet need…The Pipeline of Taysha comprises four late-stage assets (in GAN, GM2, CLN1 and Rett Syndrome) each with a risk-adjusted peak sales potential of over $1 billion,” Harrison said.
Morgan Stanley’s point of view is not aberrant on this highly speculative biotechnology. The title has 8 registered reviews and all of them are positive, for a unanimous rating from the Strong Buy consensus. The shares are priced at $16.25 and their average price target of $44.14 suggests room for growth of around 172%. (See TSHA stock analysis on TipRanks)
The second Morgan Stanley pick we’ll look at is another biotech. AlloVir focuses on the treatment of viral diseases, through the development of ready-to-use allogeneic virus-specific T cell (VST) therapies. VSTs offer the possibility of treating life-threatening viral diseases in patients with weakened immune systems. The company’s research pipeline includes five drug candidates, in various stages of development, from preclinical to pivotal phase 3 trials.
The lead candidate, posoleucel, or ALVR105, is a specific multiviral T cell therapy targeting 5 distinct viral diseases: BK virus (BKV), cytomegalovirus (CMV), adenovirus (AdV), Epstein-Barr virus (EBV), and human herpesvirus 6 (HHV-6). These are all potentially deadly pathogens and particularly dangerous for transplant patients. Posoleucel is designed to fight off viral agents until the patient’s immune system recovers enough to take over.
Posoleucel currently has no less than 6 ongoing clinical trials, including a registrational Phase 3 study in viral hemorrhagic cyctitis and three Phase 2 proof-of-concept studies. Impressively, in the Phase 2 CHARMS study, in hematopoietic stem cell transplant patients with treatment-refractory infection, posoleucel elicited a 93% clinical response, with activity against all target viruses, after six weeks of treatment.
“We believe that the VST platform has great potential and is de-risked by CHARMS data. We added AlloVir as a first choice based on a favorable risk/reward ratio prior to Phase II multivirus prevention data in 4Q21,” Morgan said. Stanley’s Matthew Harrison
Harrison rates ALVR stock overweight (i.e. buy), along with a price target of $48, showing confidence in a 101% upside for the next 12 months.
“We are AlloVir overweight because we believe there is a significant opportunity for Viralym-M and other VSTs in the pipeline to significantly improve the standard of care in a number of viral indications,” Harrison summarized. .
Overall, other analysts echo Harrison’s sentiment. 3 Buys and no holdings or sales add up to a strong buy consensus rating. Given the average price target of $44, the upside potential is 84%. (See ALVR stock analysis on TipRanks)
To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.
Warning: The views expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.