Gal Goldring

About the Author Gal Goldring

Gal is a current student at IDC University, in Herzliya, Israel studying political science.

What to Watch on Wall Street This Week: Intercept Pharmaceuticals Inc (ICPT), Tesla Motors Inc (TSLA), and Walgreens Boots Alliance Inc (WBA)

Though it’s a quiet week on the earnings front, there is plenty to read into on Wall Street this week. Here is what you need to know as Intercept Pharmaceuticals Inc (NASDAQ:ICPT) meets the FDA to discuss a pipeline drug and analysts weigh in on Tesla Motors Inc (NASDAQ:TSLA) following the Model 3 reveal. Lastly, don’t miss out as Walgreens Boots Alliance Inc (NASDAQ:WBA) announces earnings on Tuesday morning.

Intercept Pharmaceuticals Inc

This week has much in store in the realm of new and upcoming innovations. Intercept is scheduled to meet with the FDA Advisory Committee on Thursday, April 7 to discuss the company’s new pipeline drug meant to treat liver disease, OCA in PBC. Briefing documents for the meeting will be released early this week, with an anticipated focus on the use of surrogate endpoints for the Phase 3 program and increased incidence of pruritus. Although the FDA does not have to follow the recommendation of the Advisory Committee in terms of approving or rejecting drugs, it usually does.

Cowen & Co. analyst Ritu Baral reiterated an Outperfom rating on Intercept with a price target of $212 on March 28. The analyst believes the AdComm meeting will include topics regarding investor expectations, threshold patient refractory, safety, and data regarding an appropriate surrogate for PBC. Going into the meeting, Baral is confident in the company, claiming, “We expect the upcoming AdComm for ICPT’s OCA in PBC on April 7th to be positive and to support approval of the drug’s May 29 PDUFA.”

According to TipRanks, 6 analysts are currently bullish on Intercept while 4 remain on the sidelines. The average 12-month price target between these 10 analysts is $202, marking a 54% potential upside from where shares last closed.

Tesla Motors Inc

Tesla had a very successful event at the end of last week for its new Model 3 vehicle. Pre-­sales for the new model topped first ­year projections, as the number of pre­-order reservations reached a total of 235,000, topping analysts’ expectations for the entire year. Due to the excitement surrounding the event, Tesla shares traded about 3% higher on Friday afternoon and the stock’s trading volume more than doubled its 30-­day average.

CEO Elon Musk seemed pleasantly surprised tweeting on Friday, “Definitely going to need to rethink production planning.” Musk has further revealed that pre­-orders reached 180,000 within the first 24 hours of the reveal, with an average selling price of $42,000, equating to approximately $7.5 billion. This is a considerable success relative to 2015’s first quarter, in which the company sold a total of 10,030 cars.

Morgan Stanley analyst Adam Jonas, a vocal Tesla bull, reiterated an Overweight rating on the company with a $333 price target on April 1 following the event. The analyst believes the new Model 3 is better than the Model S and its flourishing pre-sales will parlay into Tesla’s “master plan,” which he describes as a “shared, autonomous electric transport network where revenue is generated through the sales of miles rather than units.” Jonas notes that the excitement surrounding the Model 3 will help drive positive investor sentiment and increase demand.

According to TipRanks, 9 analysts are bullish on Tesla, 6 are bearish, and 3 are neutral. The average 12-month price target between these 18 analysts is $253, marking a 6% potential upside from where shares last closed.

Walgreens Boots Alliance Inc

Walgreens will report second quarter earnings on Tuesday, April 5 before market open. Analysts expect the company to post EPS of $1.28. In the same quarter of last year, the company posted EPS of $1.18.

The company is still coming off the heels of its merger with Boots Alliance, and now has its sights set on Rite Aid. In January, Walgreens noted that its proposed Rite Aid acquisition was “progressing as planned.” The FTC is still reviewing the merger as the healthcare industry in the US continues to consolidate at an unprecedented pace.

Jim Cramer discussed the company ahead of earnings, stating that investors need to receive more clarity on the pending merger. Cramer then voiced his bullishness on the stock, explaining, “[Walgreens] is going to go much higher, because I think the earnings are going to be quite good.”

Ricky Goldwasser of Morgan Stanley weighed in on the company on March 31, reiterating an Overweight rating on the company with a $95 price target. The analyst will be paying close attention to any updates on the Rite Aid deal and the Optum Rx partnership. Earlier this month, Walgreens announced a partnership with Optum Rx pharmacy, a segment of UnitedHealth, which will offer lower prices for Optum Rx members who fill their prescriptions at Walgreens stores. The analyst notes that the company has beaten estimates for the 5 quarters, and adds that “Key swing factors to earnings include pharmacy gross margin pressure and timing of SG&A savings.”

According to TipRanks, based on 8 analysts offering recommendations for WBA in the last 3 months, the overall consensus is Strong Buy. The average price target for the stock is currently at $90.08, with a 3.90% upside.

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