Disconnected. This seems to be the best way to describe the current economic environment. Amid high levels of unemployment and tanking earnings, stocks aren’t just hanging in there, they’re charging forward. As a result, traditional metrics might not be enough to display the big picture. In this case, other tools are needed.
TipRanks offers one such tool that can make finding compelling plays feel less like a fool’s errand. The Smart Score feature utilizes the comprehensive market data collected by the platform, collating it according to 8 key metrics often used to gauge the trajectory of a given name. After all of this information is aggregated, each stock is assigned a single-digit score, from 1 to 10, that can indicate the direction it is heading in.
Bearing this in mind, we used TipRanks’ database to pinpoint three healthcare stocks that have received the highest possible Smart Score, a “perfect 10”. Speaking to the strength of these names, each scores a “Strong Buy” consensus rating from the Street and boasts substantial upside potential.
United Therapeutics Corporation (UTHR)
With multiple therapies approved for the treatment of pulmonary arterial hypertension (PAH) and pediatric neuroblastoma, United Therapeutics is already profitable. That said, this name is under Wall Street’s microscope thanks to its ongoing clinical activity.
UTHR recently presented positive results from the Phase 3 INCREASE trial evaluating Tyvaso in pulmonary hypertension associated with interstitial lung disease (PH-ILD) at the Breaking News Session hosted by the American Thoracic Society (ATS). The data, which was in line with data released back in February, showed that the drug significantly improved exercise capacity.
Writing for Wedbush, four-star analyst Liana Moussatos notes that during the event, Dr. Steven D. Nathan, M.D., Director of the Advanced Lung Disease Program and Director of the Lung Transplant Program at Inova Fairfax Hospital, weighed in on the results. According to Dr. Nathan, the fact that the INCREASE study hit the secondary endpoint of reduction in risk of clinical worsening events is “a key differentiator for Tyvaso as well as a clinically meaningful outcome.”
Moussatos added, “Dr. Nathan was not too concerned about no changes observed in patient-reported outcome measures/quality of life due to the short study duration (16 weeks). Dr. Nathan was impressed with the improvement in forced vital capacity (FVC; a marker of disease progression) observed with Tyvaso treatment.”
Speaking to the opportunity for this indication, there’s a substantial unmet medical need among the 30,000 PH-ILD patients in the U.S. Moussatos also highlights that other ILD clinical trials excluded severe ILD patients.
“We came away from the presentation confident about Tyvaso prospects in PH-ILD. The Company recently submitted the sNDA to revise the Tyvaso label to reflect the positive results from the INCREASE study and we anticipate FDA acceptance of the filing for review in Q3:20,” Moussatos concluded.
Unsurprisingly, Moussatos continues to give UTHR her stamp of approval. Along with an Outperform rating, she keeps the price target at $243. Should the target be met, a twelve-month gain of 103% could be in store.
Do other analysts agree with Moussatos? As it turns out, most do. 6 Buy ratings and a single Hold add up to a Strong Buy analyst consensus. At $155.14, the average price target indicates 29% upside potential. (See United Therapeutics stock analysis on TipRanks)
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