3 Reasons to Buy This Biotech Stock

Raymond James sees 60% upside for the shares

Magenta Therapeutics Inc (NASDAQ:MGTA) is among the best Nasdaq stocks today, thanks to some upbeat analyst attention. Specifically, Raymond James launched coverage of the biotech stock with an "outperform" rating and $22 price target -- representing a 60% premium to Thursday's close. The analyst gave three reasons for the bullish initiation: encouraging clinical results -- and "an opportunity to significantly increase the utilization" of -- its MGTA-456 stem cell therapy;the prospects for MGTA-145; and the potential for Magenta's C200 to alleviate headwinds for cell-based gene therapies.

MGTA shares were last seen 27.8% higher at $17.52, and earlier touched an all-time high of $17.95. Today's rally has the stock barreling through former resistance in the $16-$16.50 neighborhood, which has contained most advances since its initial public offering (IPO) -- priced at $15 -- and debut in June.

Considering the shares have more than tripled since their record low of $5.31 on Dec. 28, it's not surprising that most analysts are already bullish on MGTA. The stock currently boasts five "buy" or better ratings, with not a single "hold" or "sell" in sight. However, some price-target hikes could be in store, as the consensus 12-month price target of $20.33 now represents just a 16% premium to current levels.

What's more, a short squeeze could be in effect. Short interest accounts for more than 5% of MGTA's total available float, representing more than three weeks' of pent-up buying demand, at the security's average pace of trading.