Jefferies analyst Michael Yee upgraded the rating on ALX Oncology Holdings (ALXO – Research Report) to a Buy today, setting a price target of $3.00.
Michael Yee’s rating is based on a combination of factors that highlight the potential upside for ALX Oncology Holdings. The company is currently trading at a market capitalization significantly below its cash reserves, which suggests limited downside risk. Additionally, the upcoming catalysts, such as FDA discussions regarding positive Phase IIB gastric data and two Phase IIB studies in head and neck squamous cell carcinoma, present opportunities for significant positive developments. The market has low expectations for these events, so any favorable news could lead to substantial gains.
Furthermore, ALX Oncology is initiating new Phase II studies in breast and colorectal cancer, which represent larger market opportunities compared to their previous gastric study. These studies, set to begin in mid-2025, could provide significant upside if successful, with early data expected in 2026. The company’s recent cost reduction measures also ensure they have sufficient funding to pursue these promising opportunities, enhancing the overall risk-reward profile for investors comfortable with speculative investments.
Yee covers the Healthcare sector, focusing on stocks such as Vertex Pharmaceuticals, Gilead Sciences, and Amgen. According to TipRanks, Yee has an average return of -2.6% and a 41.51% success rate on recommended stocks.
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