Global investment bank, RBC Capital, is one of the finance world’s heavy hitters. It is the 5th largest in North America, and with 70 offices in 15 countries around the world, it has a stellar reputation. This international reputation and the financial clout that comes with it, naturally attracts top talent, and top talent can bring home the bacon, so to speak. It is no wonder then that RBC leads TipRanks’ list of Top Performing Research Firms.
With this in mind, we decided to take a look at some of the recent stock recommendations from RBC analysts, specifically ones with potential for 30%+ gains ahead.
Agile Therapeutics (AGRX)
Agile Therapeutics shares took a nosedive in late October after briefing documents released by the FDA expressed concern regarding the “effectiveness in proportion to its safety,” of Twirla, the company’s contraceptive patch, ahead of an AdCom review. As it happens, the review panel voted in favor of approval, which coincidentally, sent the stock skyrocketing.
Following the AdCom’s positive outcome, RBC surveyed physicians to better understand the experts’ view on Twirla. The results echoed those of the AdCom, and with the PDUFA set for November 16, the impression is that Twirla will most likely be granted approval by the FDA.
RBC analyst Randall Stanicky noted, “We could see approval this week or alternatively a potential ~3month delay as FDA works through labeling; either way we think shares at these levels show attractive near-term upside… Our survey of 40 OB/GYNs was surprisingly bullish on desire for Twirla as a contraceptive option; this increases our conviction that there is a place for it in the market.”
As a result, Stanicky reiterates a Buy rating on AGRX along with a $5.00 price target, which implies a whopping upside of 130% from current levels. (To watch Stanicky’s track record, click here)
How does Stanicky's bullish bet weigh in against the Street? It appears the analyst is not the only one enthusiastic on this healthcare stock, with TipRanks analytics demonstrating AGRX as a Strong Buy. This breaks down into 5 "buy" ratings in the last three months. With a return potential of over 100%, the stock’s consensus target price stands at $4.50. (See Agile stock analysis on TipRanks)
Cyber-security firm, Rapid7, provides data and analytics software to help organizations keep their networks safe from malicious cyber threats. Basically, it does what it says on the tin and reduces risk across a connected environment.
Last week, Rapid7 delivered stronger quarterly results than expected, with annualized recurring revenue (ARR) growing by 43% on top of 17% customer growth. Overall, the company posted earnings of one cent per share on revenue of $83.16 million, beating the loss of 3 cents and revenue of $80.12 million analysts expected. Therefore, the company has now raised 2019 revenue guidance from $319 million to $323.5 million.
Citing Rapid7 as a favorite SMID-cap, RBC’s 5-star analyst Matthew Hedberg believes that although estimates have gone higher, they still look beatable. Hedberg noted, “ARR growth is the key metric, as management expects it to remain at or above 30% through 2020. While the stock has performed well, we continue to believe it represents an attractive investment… In addition to new customer additions, we believe 2020 should see the cross-sale of additional products like InsightIDR and InsightAppSec and longer-term InsightConnect. This value generation was shown in ARR per customer, which grew 22% y/y… Our estimates move higher, but we still believe upside remains through 2020…”
This has led Hedberg to keep his Buy rating along with a price target of $81.00. With RPD currently trading at $51.08, this provides upside of about 60%. (To watch Hedberg’s track record, click here).
Looking at the consensus breakdown, the cyber-security firm has amassed 8 Buys and 1 Hold in the last three months, making Rapid7 a Strong Buy. The average stock-price forecast is $65.50. Not quite as bullish as Hedberg, this target still provides upside of 28% from its current price. (See Rapid7 price targets and analyst ratings on TipRanks)
Aprea Therapeutics (APRE)
Aprea Therapeutics is a Boston, Massachusetts-based biopharma focused on developing and bringing to market novel cancer therapeutics that reactivate mutant tumor suppressor protein p53. Aprea’s main drug candidate is APR-246, a small molecule in clinical development designed to treat various forms of cancer with TP53 mutations. These are found in half of all cancers. Through its unique design, APR-246 is able to restore immune defenses and promote apoptosis of cancer cells.
The company will present updated data from its phase II trial in December, and it believes APR-246 will be a first-in-class therapy if approved by regulators.
RBC’s Gregory Renza agrees, saying, “We believe APRE’s small molecule p53 reactivator pipeline in oncology, led by APR-246, has ample potential given the data to date and catalyst setup expected over the year. We see APRE emerging as a competitive player in the oncology space, especially in severe TP53 populations where unmet need is high, and believe in its potential for long-term share appreciation as the programs continue to de-risk… If approved, we see prospects of $800M WW peak sales in MDS at a ~35% POS, driving 2/3 of our valuation.”
Renza initiated coverage with a bullish call and set a price target of $33.00, indicating upside of over 32%. (To watch Renza’s track record, click here)
It’s a tad quiet when it comes to analyst coverage, with only two other analysts currently providing ratings for APRE, both recommending a Hold. With an average price target of $26.33 providing a modest 5% upside from its current price, the biopharma newbie ranks as a Moderate Buy. (See Aprea price targets and analyst ratings on TipRanks)