2 Drug Stocks Popping on Fresh "Buy" Ratings

Both names were up more than 5% in early trading

Mizuho Securities initiated coverage on Abeona Therapeutics Inc (NASDAQ:ABEO) with a "buy" rating and $17 price target, representing expected upside of 69.3% to last night's close at $10.04. In reaction, ABEO stock is up 6.6% to trade at $10.70.

Analysts are already upbeat toward the rare disease specialist, with all seven in coverage maintaining a "strong buy" rating. Short sellers, on the other hand, have actively targeted ABEO this year, with short interest up more than 34% from the Jan. 1 reporting period.

This steady selling pressure has likely had some effect on the equity's technical trajectory, with the shares down 33% year-to-date. Plus, ABEO stock hit a new annual low of $9.66 this past Tuesday, and its 14-day Relative Strength Index (RSI) settled last night at 26 -- in oversold territory. In other words, today's bounce may have been in the cards.

Bernstein started Sarepta Therapeutics Inc (NASDAQ:SRPT) with an "outperform" rating and $170 price target -- a 39.3% premium to Thursday's close at $122.01 -- with the brokerage firm waxing optimistic on the company's Duchenne muscular dystrophy (DMD) treatment. Against this backdrop, SRPT stock is up 5.3% to trade at $128.50.

Today's positive price action has the equity on track to snap its six-session losing streak. This sell-off stalled yesterday near the security's 120-day moving average -- a trendline that cushioned mid-February pullback as well. Year-to-date, Sarepta Therapeutics stock has added 131%.

Short-term options traders, meanwhile, have been more put-heavy than usual, per SRPT's top-heavy Schaeffer's put/call open interest ratio (SOIR) of 1.12 -- in the 98th annual percentile. This is due to heavy accumulations of open interest at the November 95 and 105 puts, the stock's top two open interest positions.