Cempra Inc (NASDAQ:CEMP) seen its shares falling nearly 9% (as of this writing), after analyst Ritu Baral of investment banking firm Cowen has downgraded CEMP from Outperform to Market Perform, while removing her price target based on “lack of clarity on CEMP’s path forward on multiple fronts.”
Baral wrote, “The main direct driver of our downgrade and target removal is the significant lack of clarity on the path forward for both lead product solithromycin as well as Cempra as a company. There are substantial open questions facing the solithromycin and Cempra value proposition. Profound uncertainty remains on the scope of potential label warnings, CMC approvability, and post-marketing commitments as well as the usual but still central risks of commercial launch and sustained sales. This naturally leads to central questions on the cash runway, given uncertainty on the timing of approval, launch, and required investment.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ritu Baral has a yearly average return of 5.5% and a 41% success rate. Baral has a -30.4% average return when recommending CEMP, and is ranked #535 out of 4227 analysts.
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. Out of the 13 analysts polled by TipRanks, 5 rate Cempra stock a Buy, 7 rate the stock a Hold and 1 recommends a Sell. With a return potential of 218%, the stock’s consensus target price stands at $21.31.