Roth Capital analysts are weighing in on solar-system company SolarCity Corp (NASDAQ:SCTY) and biotech company ContraFect Corp (NASDAQ:CFRX), as news of a potential investment tax credit extension and Phase 1 study update sent shares of both companies soaring.
SolarCity shares jumped nearly 28% to $51.22 following this morning’s news that a ‘sweeping bill’ has been introduced to the U.S. Congress to extend the solar Investment Tx Credit an additional 5 years, through the year 2020, while leaving that credit at 30%. In addition, SolarCity hosted its Analyst Day yesterday, where management increased the transparency into its business.
In reaction, Roth Capital’s Philip Shen reiterated a Buy rating on shares of SolarCity, while raising the price target to $65 (from $55), which implies an upside of 28% from current levels.
Shen commented, “While many peers are struggling, the event, in our view, punctuated the strength of the company’s competitive position in terms of scale, cost structure, and cost of capital. With the ITC on its way to being extended and a positive initial NEM 2.0 proposal, we see more upside ahead for the stock.”
“Looking ahead, we believe SCTY has visibility into uncommitted tax equity funding for the back half of 2016 and has the ability to recycle its aggregation facility and MyPower conduit with ABS offerings.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Philip Shen has a yearly average return of -11.0% and a 31.0% success rate. Shen has a -13.6% average return when recommending SCTY, and is ranked #3565 out of 3632 analysts.
Out of the 16 analysts polled by TipRanks, 10 rate SolarCity stock a Buy, 5 rate the stock a Hold and 1 recommends a Sell. With a return potential of 22.2%, the stock’s consensus target price stands at $61.86.
ContraFect shares are rising 22.54% in mid-day trading to $4.77, adding to their 27% rise yesterday, after the company announced the conclusion of its first-in-man, randomized, doubleblind, placebo-controlled Phase I study assessing the safety of four doses of CF-301 in ~25 healthy volunteers. An independent DSMB reviewed the safety, tolerability and PK data for each dose cohort and found no safety issues relating to CF-301.
Subsequently, Roth Capital analyst Joseph Pantginis reiterated a Buy rating on ContraFect, with a price target of $14, which represents a potential upside of 195% from where the stock is currently trading.
Pantginis commented, “We believe this is an important event for the company and the lysin antibacterial technology as it received an independent review indicating this is a safe therapeutic approach. As for any first-in-man product there always exists a worry for initial toxicity, which has not occurred and an important hurdle has been overcome. The goal now is to proceed to the next stage in patients with S. aureus bloodstream infections including endocarditis and likely MRSA as well. We believe that once the Phase II program begins in 2016, data should be accumulated quickly such that we could potentially have data readout later in 2016.”
According to TipRanks.com, analyst Joseph Pantginis has a yearly average return of -5.6% and a 37.6% success rate. Pantginis has a -5.0% average return when recommending CFRX, and is ranked #3557 out of 3632 analysts.
As of this writing, the 2 analysts polled by TipRanks rate ContraFect stock a Buy. With a return potential of 216.5%, the stock’s consensus target price stands at $15.