In a research report released on Monday, Leerink top analyst Michael Schmidt initiated coverage on shares of Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) with a price target of $20, which represents a potential upside of 45% from where the stock is currently trading.

Schmidt wrote, “Despite recent strong stock performance, ARIA shares still trade at a discount to other commercial stage Oncology Biotech companies while the top line is expected to grow above that of its peers with a 35% 2016-18E CAGR. Based on discussions with MEDACorp KOLs and our analysis of the CML market, we expect Iclusig to deliver above consensus sales growth over the next 3 years while Street expectations for the company’s pipeline products are still low.”

“Driven by a best-in-class product profile, we believe brigatinib is well positioned to exceed commercial expectations in ALK + NSCLC, while AP32788, the company’s differentiated EGFR inhibitor, represents what we view as a free source of upside with Ph I data expected in mid-’17. ARIA’s new management team has positioned a leaner, more focused company for commercial execution in the US while also maintaining future strategic flexibility. Our conservative $20 per share DCF-based price target attributes $10 to Iclusig and $10 to brigatinib,” the analyst continued.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Schmidt has a yearly average return of 25.1% and a 68% success rate. Schmidt has a average return when recommending ARIA, and is ranked #34 out of 4183 analysts.

Out of the 8 analysts polled by TipRanks, 5 rate Ariad stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell. With a downside potential of 21%, the stock’s consensus target price stands at $10.86.