It was a big day for Kymera Therapeutics (NASDAQ:KYMR) recently, as the company saw a nice upward spike of 16.8% on the strength of several points. New analyst coverage, insider selling, short increases, and even some outside news contributed to drive interest in the medical company. Its focus on targeted protein degradation represents some novel new possibilities, and for investors, there's nothing quite like a novel possibility to draw interest.
A Range of Gaining Factors
Several factors likely contributed to Kymera's big gain recently, and those gains actually continued into this morning's trading. Some profit-taking has likely stepped in, though, as the company is currently trading at $36.64 as of this writing. That's down from the highs seen so far today—back at 10:00 AM, the company hit $37.97 per share—but it's still well above yesterday's closing price of $36.29.
Some significant insider selling has been taking place at Kymera of late; back in February, Jared Gollob sold off 7,550 shares of Kymera at an average price of $58.39. The company's CEO, Nello Mainolfi, sold off 15,267 shares, though that leaves Mainolfi with a reported 386,138 shares, suggesting a minor rebalancing effort, or perhaps a simple need for liquidity in general. This might seem like bad news, but several institutions have stepped in to acquire shares, including BlackRock Inc., Caas Capital Management, and Charles Schwab Investment Management.
Additionally, the company will also be making an appearance at the Society for Investigative Dermatology's annual meeting, where it will be presenting results from a “non-interventional study” from patients with hidradenitis suppurativa, a chronic condition that might best be described as “inverse acne,” where lumps can form under the skin. Kymera is currently working on a treatment for same involving the “expression of IRAK4” and other means to address skin inflammation.
An Increasingly Bullish Analyst Front
The biggest push for Kymera, though, likely came from the analyst sector. New coverage was recently opened and old coverage improved to the bullish. Our latest research, meanwhile, details how Kymera is gaining ground with analysts.
Six months ago, the company was split evenly, with two “buy” and two “hold” ratings. That rapidly improved, however, as three months ago, the company had four “buy” ratings to two “hold” ratings. That remained the case until today, where the company added a fifth “buy” rating as Berenberg Bank initiated coverage on the company with its “buy” rating.
Price targets, meanwhile, run a surprisingly broad gamut. Right now, the low is held by Bank of America at $35, who also has a “neutral” rating on the company. The high, meanwhile, is held by Morgan Stanley, who actually backed off its own high a bit, dropping from $74 to $69, which is actually still the high point as our research goes. The other price target in the field is held at Guggenheim, who has a $42 price target. That's close to the average of $48.67, and is still well below its current share price.
A Speculative Ploy With Potential
So now, we're left to figure out why Kymera gained ground at the rate it did, and is actually still gaining today. Right now, it seems primarily linked to the opinions of analysts, who are looking for the company to do better going into its second quarter. It last turned in earnings back in March, so there's still quite a ways to go before the company's next earnings report makes an appearance.
While the company is certainly making advances in its product line, as confirmed by its upcoming appearance at the Society for Investigative Dermatology, it hasn't released any “killer apps”, so to speak, that might prompt a boost in stock prices. It seems to be making progress in the direction of releases, but there's nothing immediate to prompt the gains.
There are, however, signs that institutions are increasingly interested in Kymera, and that the insider selling is comparatively mild, addressing bare fractions of current holdings. If the insiders were dumping their stock, that would be a different matter, but these are fairly small sales seen so far. The institutional interest is more than enough to outweigh that. That should provide a note of confidence in the stock itself; why would institutions be buying in in substantial quantities if they were looking for trouble?
Thus, those looking for a position in the healthcare field that isn't related to Covid-19 and is rather carefully focused on skin issues may want to look into picking up some Kymera shares. It's a fairly specialized operation, but it's addressing some serious issues all the same, and owning a piece of that may be a smart move.
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