Comparing and selecting stocks for investment may involve any number of increasingly complex strategies and approaches, but sometimes simpler is better: targeting a stock with significant upside potential at an opportune moment. Certainly, achieving this goal is easier said than done, and there is no guarantee that a company expected to make sizable gains will follow through on that promise. However, looking to Wall Street analyst ratings and predictions can be a helpful place to start.
In a screen of stocks which analysts believe will at least double in value based on consensus price targets, a number of healthcare names in particular emerge. The portion of the healthcare sector made up of companies testing, developing, and marketing new drug treatments is known for high-flying stock rallies.
When one of these firms makes a breakthrough therapeutic discovery, reports strong clinical trial data, or successfully launches a game-changing medicine, shares often skyrocket. On the other hand, these investments are often considered to be extremely high-risk, as the failure of a product may even lead to the company's demise.
Three smaller healthcare companies that analysts expect to more than double in share price include Immunocore Holdings plc (NASDAQ: IMCR), GH Research plc (NASDAQ: GHRS), and Intellia Therapeutics Inc. (NASDAQ: NTLA).
Immunocore: Strong Oncology Product Pipeline
Immunocore is a biotech firm that develops treatments for types of cancer, autoimmune diseases, and other conditions. One of the company's latest and strongest products is KIMMTRAK, a therapeutic used in the treatment of metastatic uveal melanoma.
This drug has also shown promise in clinical trials for the treatment of certain other types of melanoma. This has led to KIMMTRAK revenues of more than $80 million in the latest quarter, 28% higher than one year earlier. Analysts expect KIMMTRAK to reach the broader market by 2027.
Crucially, Immunocore also has a broad pipeline of other treatments at various stages of development and testing, including trials for brenetafusp, a potential treatment for other types of cancers. Overall, analysts believe Immunocore's price target is $73.73, about 115% above current levels. However, there is not uniform consensus on this stock's suitability for investors—analysts at UBS initiated coverage with a "sell" rating in late October based on an expectation of increased competition to come.
GH Research: Potential for Growth in Major Therapeutics Market
GH Research is an Irish pharmaceutical company working to develop potential treatments for various types of depression as well as psychiatric or neurological disorders. Nearly 30% of adults have been diagnosed with depression at some point in their lives, meaning that the market opportunity for therapeutics for the treatment of depression is enormous.
GH's leading candidates, known as GH001 and GH002, are undergoing phase 2b trials, and analysts are optimistic about the potential for each of these drugs based on prior results. Further, the company appointed in September a new CEO known for his specialization in this field, which has helped to boost analyst confidence.
All told, analysts believe GH's shares could more than quadruple in price to $36.67. It's important to note, though, that this is based on just three ratings.
Intellia: Promising Gene Editing Technology
Intellia is a genome editing company that uses engineered cell therapies, among other things, to develop treatments for cancers and autoimmune diseases. The company recently reported strong trial enrollment and demand for its multiple leading therapeutic candidates.
While it may be some time until the firm has late-stage trial results, with close to $1 billion in cash reserves it should have sufficient money to sustain its operations for about two more years.
Losses per share beat analyst estimates for the most recent quarter and improved by about 4% year-over-year, while total revenue also topped predictions despite falling nearly a quarter in the same period.
During this quarter, the company also made significant progress toward approval of its in vivo gene editing technology nex-z. Analysts believe shares of NTLA could rise by more than 250%, based on a consensus price target of $58.13.
Making a Bold Bet
Each of these three firms is preparing potentially transformative therapeutic products or technology for market launch. While there are signals that progress is being made, it is no guarantee that these developments will come to fruition, or that they will yield significant financial benefits.
Thus, it's important for investors to consider the risks of these and similar stocks before getting caught up in the excitement of massive upside potential.
