We’ve discussed penny stocks and analyst ratings many times before. Are these firms always correct about the companies they cover? No, but the information they offer doesn’t hurt when it comes to research. These firms will often dive into individual stocks to determine what the future might hold based on current developments at the time. They’ll look at things like the business pipeline and see what type of potential could be on the horizon.
One thing to consider when it comes to ratings is that smaller stocks are much more speculative in nature. This means that the outlook “today” might not be the same outlook a few months from then. What’s more, price targets can also be a bit conflicting. Yesterday, for instance, we discussed a company with shares trading below $4, yet analysts set a $21 price target on the stock. The highest the particular company’s stock had ever traded was $12.70. Did the analyst see so much potential that it would value the company at nearly 100% higher than its all-time high? I’ll leave that decision up to you. But it is important to have a realistic approach to analyst ratings.
Now, moving onto this list of penny stocks. Today there’s been a flurry of new ratings issued by a few firms, and so far, the new price targets set appear very bullish. While many of the companies have several irons on the fire, it’s important to remember that they’re still penny stocks, and volatility plays a large role. Based on recent analyst opinions, heading into the rest of the quarter, will they be on your list of penny stocks to buy right now or avoid?Penny Stocks To Buy [According To Analysts]
- Rigel Pharmaceuticals Inc. (NASDAQ: RIGL)
- Infinity Pharmaceuticals Inc. (NASDAQ: INFI)
- VistaGen Therapeutics Inc. (NASDAQ: VTGN)
- Titan Pharmaceuticals Inc. (NASDAQ: TTNP)
There’s more to Rigel Pharmaceuticals than analyst ratings today. Though, it’s worth noting Citigroup’s last update put a price target roughly 76% higher than the RIGL stock price. The firm’s Buy rating on the stock and $8 price target suggested bullish undertones at the time. Little did they know that this week’s development would trigger significant market momentum.
This week Rigel announced that the company and Eli Lilly (NYSE: LLY) entered into a global exclusive license agreement and strategic collaboration to co-develop & commercialize Rigel’s R552. This is the company’s autoimmune and inflammatory disease treatment. In pre-clinical studies, Rigel’s R552 demonstrated the prevention of joint and skin inflammation in a RIPK1-mediated murine model of inflammation and tissue damage. The company has completed Phase 1 clinical trials on R552 and expects to start Phase 2 clinical trials this year as part of the collaboration.
Lilly will pay $125 million up-front to Rigel as part of the deal. The company is also eligible to receive up to $835 million in milestones plus a tiered royalty schedule.Infinity Pharmaceuticals Inc.
A rating from Piper Sandler today put Infinity Pharmaceuticals in the analyst spotlight. The firm put an Overweight rating on the stock along with a $7 price target. Based on the INFI stock price at the close on Wednesday, Piper’s forecast is 83% higher than current levels. However, Infinity also announced that it closed a $92 million offering at $3.80 a share in tandem with this rating. Conveniently, Piper Sandler was the book-runner for the offering. Use of proceeds are earmarked for clinical development of its eganelisib, among other things.
This month Inifinity reported data from MARIO-275 at the American Society of Clinical Oncology 2021 Genitourinary Cancers Symposium. This is the company’s randomized, placebo-controlled Phase 2 study evaluating the benefit of adding eganelisib (IPI-549) to Bristol-Myers Squibb Co’s (NYSE: BMY) nivolumab (Opdivo®) in patients with advanced urothelial carcinoma.
The response in the market was favorable following the presentation. However, the penny stock pulled back when Infinity first announced it would be raising funds. Now that the offering is closed and analysts have taken a bullish stance, will INFI stock mount a recovery move this quarter?VistaGen Therapeutics Inc.
Another one of the penny stocks with a Buy rating this week is VistaGen Therapeutics. Jefferies analysts slapped a Buy on the stock along with a $6 price target. This puts the VTGN stock forecast over 190% higher than current levels based on Wednesday’s closing price. What’s more, this new rating came after VistaGen announced its latest round of earnings results. The company also updated its expected clinical studies this year relating to its central nervous system treatment pipeline.
VistaGen is expecting to launch a pivotal Phase 3 clinical study of its PH94B as a potential acute treatment of anxiety in adults with social anxiety disorder. It also aims to conduct a small exploratory PH94B Phase 2 study in adult patients experiencing additional anxiety-related disorders.
“This year, we will also complete preparations to launch Phase 2B clinical development of PH10 as a potential rapid-onset stand-alone treatment for major depressive disorder in early 2022. Finally, later this year, based on successful preclinical studies involving AV-101 alone and in combination with probenecid, we will launch Phase 1B clinical development of the combination to enable potential exploratory Phase 2 development of in several CNS disorders.”Shawn Singh , Chief Executive Officer of VistaGen
Given these developments and potential future milestones, will analysts be right about the upside on VTGN stock?Titan Pharmaceuticals Inc.
Finally, Titan Pharmaceuticals scored an upgrade from Maxim Group this week. The firm boosted TTNP to a Buy and also placed an $11 price target on the penny stock. Based on Wednesday’s close of $3.55, Maxim is forecasting a 209% potential move for TTNP stock. Let’s keep an eye on current and planned developments to see if that makes sense.
Earlier this month, Titan announced early study results in its JT-09 ProNeura development program. The company said that JT-09, combined with the ProNeura long-term drug delivery technology, demonstrated high potency and positive results for treating moderate-to-severe chronic pruritus. According to Titan, this could pave the way for the next steps with the platform.
“Pilot pharmacokinetic studies in rats previously indicated that subcutaneous placement of ProNeura implants containing JT-09 could deliver potentially therapeutic concentrations of this KOR agonist for up to six months or longer,” said Kate Beebe DeVarney, Ph.D., President and Chief Operating Officer of Titan.
Though these are early results, it does give traders something to track as the year rolls on. The addition of Maxim’s latest upgrade may also be something to keep in mind.Penny Stocks & Analyst Ratings
Again, when it comes to analyst ratings and penny stocks, volatility tends to play a role. While they are not failproof, analysts do take the time to focus on fundamentals and future potential. Based on this short list of penny stocks, where do you stand? Are you in agreement with the outlook, or are these to be avoided right now?