NEW YORK (MainStreet) Morgan Stanley has given GW Pharmaceuticals (GWPH) its vote of confidence, stamping the leader in cannabis-based drugs with a bullish "overweight" rating and a $103.00 price target for the stock on account of the upside potential of epilepsy drug Epidiolex and the company's "novel platform."
Upon the pre-market release of the bank's upgrade, the stock jumped from its Monday close of $46.04 to an opening price of $50.10. The stock has continued to roar, up 36.38% to $62.79 as of early this afternoon. The company, which has a market cap of $682.1 million, last reported earnings on Tuesday February 4, with $0.02 earnings per share and revenue of $7.49 million last quarter.
But in a marijuana stock sphere that too often gets a bad rap -- as with GrowLife's (PHOT) recent suspension from trading by the SEC -- today's upward leap for GWPH is perhaps no surprise: a legitimate well-researched anointment can give the stock a natural high.
"This was the most aggressive price target I have seen," said Alan Brochstein, founder of marijuana stock subscription service 420 Investor. "The key takeaway is that the company has a rich pipeline of unique products."
As Morgan Stanley pointed out, Epidiolex will be the largest driver in value creation. That drug (a purified CBD extract) and another (a purified CBDV extract) are in development, with early focus on Dravet syndrome, a severe form of pediatric epilepsy. GWPH intends to expand to treatment of Lennox-Gastaut syndrome throughout the research process.
"We believe that while small and still anecdotal, there is a consistently strong and building set of data (case cohort and controlled) which highlight the positive impact of CBD on refractory epilepsy [post-traumatic seizure]," Morgan Stanley wrote in the report.