(Bloomberg) -- Arrowhead Pharmaceuticals Inc. shares have another 41% to climb, according to Morgan Stanley, which upgraded the stock to Overweight and hiked its price target to $100, citing a potential blockbuster drug.
"We expect momentum to continue ahead of [phase three clinical trial] data [for Plozasiran] in 3Q26, where we expect positive data to unlock a multibillion-dollar opportunity that remains underappreciated," analyst Michael Ulz said in a note to clients.
The bullish call hinges on Phase 3 trial results for plozasiran, an investigational therapy for severe hypertriglyceridemia (SHTG), a condition with dangerously high triglyceride levels. Based on prior results, Ulz expects the data, due in the third quarter, to be positive. The analyst nearly doubled his peak sales forecast for the drug to $3.2 billion from a prior $1.7 billion.
The upgrade suggests a 41% upside from Tuesday's price of around $70.85. Arrowhead shares have already soared more than 470% over the past 12 months, and are up 6.7% in 2026.
Morgan Stanley's upgrade makes it the tenth firm out of twelve tracked by FactSet to rate Arrowhead as a Buy or equivalent. Only Leerink Partners and Bernstein Research maintain Hold ratings. The upgrade follows Arrowhead's first New Drug Application submission for plozasiran in late 2024, a key step in its transition to a commercial-stage company.
Arrowhead is not without competition. Ionis Pharmaceuticals is also developing a treatment for SHTG called olezarsen. While Ionis has "set the price" in the market, according to Ulz, he believes there is room for multiple therapies. Ulz sees plozasiran as having significant potential, especially for high-risk patients prone to pancreatitis.
The upgrade reinforces the bullish sentiment surrounding Arrowhead's RNA interference (RNAi) technology platform. For investors, the key upcoming catalyst is the release of the Phase 3 plozasiran data in the third quarter. A positive result could validate Morgan Stanley's new price target and fuel the next leg of the stock's rally.
This article is for informational purposes only and does not constitute investment advice.
