Rocket Lab, Coinbase, Bristol Myers-Karuna deal: Trending tickers

Karuna Therapeutics (KRTX) shares jump in late trading after news that the company will be acquired by Bristol Myers Squibb (BMY) for $14 billion, which is $330 per share in cash.

Rocket Lab (RKLB) shares soar as the company won a $515 million contract with the United States government, to manufacture, deliver, and operate eighteen space vehicles.

Coinbase (COIN) shares are up in late trading as Citizens JMP Securities almost doubles its price target on the stock, raising it from $107 to $200.

Yahoo Finance’s Josh Lipton and Jared Blikre take a look at some of the trending tickers of the day. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: Now let's get to some trending tickers in today's trade. First up, shares of Karuna Therapeutics. They are surging today. That's after announcing Bristol-Myers will acquire the drug developer for $14 billion. Shares of Bristol-Myers edging higher here.

So that's the headline here, Jared. Bristol-Myers agreeing to buy Karuna, $14 billion. That's $330 a share in cash. Karuna, a schizophrenia drug developer company, apparently expecting a decision from the FDA there by September 2024. Reports noting this drug could generate as much as $4 billion by 2020. And the transaction, it sounds like, expected to close the first half of next year.

JARED BLIKRE: Yeah, I do have some commentary by TheStreet on this deal-- Cantor, which rates the stock a buy-- or neutral, actually, with a price target of 55, says the deal is, quote, "absolutely a step in the right direction." And it fuels the neurology as a growth pillar narrative that BMI has been pushing.

Also, one more, by Mizuho, rates KRTX a buy-- price target 245-- seeing the deal receiving less regulatory scrutiny and more easily received FTC approval. Here's a quote. "Given current scarcity value of high-profile, high-revenue potential, derisked assets such as KRTX, we wouldn't rule out the possibility that bidders could emerge."

So more M&A in this space. It's been kind of a dearth this year. And we're going to be talking more about that with some of the guests. But we want to move on to shares of Rocket Lab. They're taking off today after winning a $515 million US government contract. Under the agreement, Rocket Lab will manufacture, deliver, and operate 18 space vehicles. And I do have some commentary on this as well.

Let me just find this in my notes here. There we go. Here's Citi. It rates the stock at neutral, price target of $5.25. Says he believes the contract is for a communications mission, given the cost per satellite and Rocket Labs' expertise in the area, saying it looks like a firm, fixed price award with some level of developmental work, and also likes the related-- related to that is the integration of the payload. So lots of space themes going on here with this company.

JOSH LIPTON: Yeah. And by the way, unlike Bristol-Myers, by the way, which even though it's down about 30% this year, most in the name are still on the sidelines. Analysts are fans of this one, Jared. You have 80% who cover this name say you should buy it.

And here's your bullish take from the team at Stifel, by the way, on this new contract we're talking about. They called it meaningful. They told their clients they have-- just basically having a separate subsidiary equipped to handle national security programs means, in their opinion, the company is creating differentiation, driving value in a market, they say, poised to grow, given just the increased needs of the US government. Stifel has a buy on this one. Price target is 10.

JARED BLIKRE: All right. And actually let's go to the YFi Interactive real quick here. I just want to pull up Rocket Lab and do a little technical analysis. This is from the beginning here. And you can see, this was a SPAC that came to market at about $10 a share. So it's about trading a half of that right now.

And $5 has been a floor. And we've seen a little bit of lift-off here. But it's been rough. And taken as a whole SPACs, well, that entire group seemed to have died off in 2022 during that nasty bear market. So not a surprise there. But if you look at the year to date, it looks like it's improving quite a bit.

JOSH LIPTON: Yeah, with today's gain, nice jump. And finally, let's check out Coinbase here, climbing today. After a bullish call from JMP, the firm nearly doubling its price target for Coinbase to $200 from $107. So that's the move. This is JMP's Devin Ryan telling his clients at Coinbase-- he actually he told them, it actually reminds him of Amazon, Jared, because Coinbase like Amazon, he says, skating, in his opinion, to where the puck is going.

Raises target-- this is a big one-- from 107 to 200. So a nice big move there. Of course, Coinbase has enjoyed this staggering run this year. It's up about 400%. That's as, obviously, Bitcoin rebounding on a bet that Gary Gensler and his team at the SEC are going to green-light a spot Bitcoin ETF. Ryan says he doesn't expect a smooth performance for the industry or the stock. But the industry is here to stay, he says, and will be much larger over the next 10 years, with Coinbase, he argues, continuing to operate at the forefront.

JARED BLIKRE: I'll tell you what. Let's go to the YFi Interactive here. And I'm going to chart Coinbase from the IPO. We started out high with huge expectations. And the IPO managed to talk to-- or excuse me-- top tick Bitcoin itself in the entire crypto market. And it was down in 2022 quite a bit of course. We had all the bankruptcies.

But Coinbase, for me, has been a story about SEC regulation. They've gone head to head, toe to toe with the SEC. We're not doing very well in '21-- 2021 and 2022-- a couple of missteps there. But it seems like Gary Gensler now and the SEC is kind of on the back foot. And lots of optimism for crypto.

And this is the time that institutions-- it seems real this time, as opposed to before when blockchain was just kind of undeveloped and DeFi had to go through its growing pains. It seems like this next leg up could be the final institutionalization of Coinbase and crypto that everybody's been waiting for.

JOSH LIPTON: Now, what will be interesting is let's say if and when Gensler green-lights that spot Bitcoin ETF, is that-- is that a positive catalyst that moves us-- the space higher? Or have we talked about it so much--

JARED BLIKRE: Sell the news.

JOSH LIPTON: Sell the news.

JARED BLIKRE: Yeah, it could be either way. I think the fundamentals of Bitcoin and crypto itself are going to be enough to overcome any sell the news. That's just a personal opinion.