Oppenheimer Likes This Cancer Stock Before Earnings

The analyst's new price target represents expected upside of 51%

Ahead of earnings next Tuesday, May 7, Oppenheimer initiated coverage of Allogene Therapeutics Inc (NASDAQ:ALLO) with an "outperform" rating. In addition, the brokerage firm set a lofty price target of $45 -- a 51% premium to Thursday's close. The brokerage firm waxed optimistic on Allogene's off-the-shelf CAR-Ts prospects and its allogeneic product pipeline.

ALLO went public back in October, pricing its initial public offering (IPO) at $18 per share. The security notched an all-time high of $35.55 -- almost twice its IPO price -- in early November, but has subsequently run into resistance in the $33-$34 area. A rally to $45 would represent 2.5 times ALLO's IPO price, and uncharted territory. At last check, the shares were up 1.4% to trade at $30.13.

While most analysts already lean bullishly toward Allogene shares -- five of six brokerage firms offer up "buy" or better endorsements -- a strong earnings showing next week could trigger a short squeeze. Short interest surged 17.7% during the past two reporting periods, and now accounts for 11.2% of the equity's total available float. At ALLO's average pace of trading, it would take more than 25 sessions to repurchase these pessimistic positions.