Analyst: Buy This Small-Cap Pharma Stock

Jefferies initiated coverage with a "buy" rating and a $15 price target -- nearly double the stock's current levels

Jefferies just initiated coverage of Kala Pharmaceuticals Inc (NASDAQ:KALA) with a "buy" rating and a $15 price target.In response, the shares of KALA are up 1% at $8.13, trying to battle back after an ugly 2018.

KALA stock is coming off it's Dec. 24 all-time-low of $4.03 -- now up 66.4% year-to-date. The 30-day moving average, which has pushed the stock lower in the past, has proved a recent layer of support. Plus, the equity has been testing the $9 level of late -- an area it hasn't broken north of since mid-October.

Jefferies is joining an enthusiastic bunch. The drug concern currently boasts five "strong buy" ratings from analysts. What's more, the lofty consensus 12-month target price of $22 holds a 170.4% premium to current levels.

Meanwhile, some unusual put activity is taking place, with 905 contracts across the tape -- roughly six times the average intraday volume. This activity is being driven by heavy trading at the April 2.50 and 5 puts. Data shows possible spread activity at these contracts earlier in the week, and traders may now be closing out their positions.

Short sellers could be hitting the exits soon, too. Short interest shot up 40.4% in the last reporting period. The 1.4 million shares sold short represent a healthy 7% of the stock's available float. At KALA's average daily trading volume, it would take almost five days to buy back these bearish bets.