Curative gene therapy specialist Bluebird Bio (NASDAQ:BLUE) popped up strongly amid a broadly positive Friday on Wall Street. Primarily, the enthusiasm centers on JPMorgan Chase’s Eric Joseph, who initiated coverage of BLUE stock with an “overweight” rating. Also, shares might tempt speculators hoping to spark a short squeeze given its attention from the bears.
According to CNBC, JPMorgan initiated coverage of BLUE stock, in part because the underlying enterprise enjoys “best-in-class” positioning. From its research note, “[w]ith two transgenic cell therapy launches underway, and a third on deck perhaps by year end, we see bluebird being well-positioned in the emerging class of autologous cell therapies for inherited hematological disorders.”
Further, the banking giant’s financial analysis arm stated, “feedback from our physician survey supports compelling latent demand for the modality in treating sickle cell disease.” Here, Bluebird’s lovo-cel therapy may offer a very competitive if not best-in-class positioning for addressing the disease.
According to data published by the National Library of Medicine, sickle cell disease is a multisystem disorder. It is also the most common genetic disease in the U.S.
BLUE Stock May Court Short-Squeeze Speculation
Another factor that may be contributing to BLUE stock gaining ground today — which jumped 17% and is up nearly 22% at time of writing — centers on possible short-squeeze speculation.
According to data from Fintel, the short interest for BLUE stock reached 23.81% of its float. As well, its off-exchange short volume ratio hit 45.99%. Its short interest ratio is 5.29 days to cover, which is modestly elevated though not remarkable compared to the most heavily shorted securities.
In addition, BLUE stock scores 69.69 out of 100 in Fintel’s proprietary Short Squeeze Score. The investment resource and guidance platform claims stems from “the result of a sophisticated, multi-factor quantitative model that identifies companies that have the highest risk of experiencing a short squeeze.”
To be fair, not all the attention on Bluebird centers on speculative motivations. Fundamentally, gene editing represents a sizable and burgeoning market. According to P&S Intelligence, the genome-editing market size reached a valuation of $5.413 billion in 2022. Experts project that the segment will expand at a compound annual growth rate (CAGR) of 18% through 2030, culminating in a valuation of $20.4 billion.
Why It Matters
According to TipRanks, Wall Street analysts peg BLUE stock as a consensus hold. On average, their price target lands at $6.83, implying over 52% upside potential. JPMorgan has a $7 price target, which implies nearly a 53% return.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
