What happened
ChromaDex (CDXC +3.11%) was a hit on a slightly downbeat Tuesday for the broader market. Its shares raced nearly 10% higher on a price target increase from an analyst.
So what
New York-based investment bank H.C. Wainwright lifted its price target on the stock Tuesday. Actually, that's an understatement; that level was shot into the sky, to $16 per share from the previous $7. The company maintains its buy recommendation on ChromaDex.
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H.C. Wainwright's upgrade is not the only one in recent days. Last week, Ladenburg Thalmann analyst Jeffrey Cohen cranked his target price on the shares up to $12 from the preceding $8.50, and Brian Nagel from the influential Oppenheimer nearly doubled his from $9 to $17. Both prognosticators have the equivalent of a buy recommendation on the stock.
Two major recent factors are behind the sunnier outlooks. First, ChromaDex reported fourth quarter results that, while basically in line with analyst expectations, showed a considerably narrower EBITDA loss compared to the year-ago quarter. Second, and perhaps more important, the company announced that it signed a supply deal with Walmart for the monster retailer to carry its flagship Tru Niagen dietary supplement in 3,000 of its stores.
Now what
ChromaDex has an active product pipeline and a modest chemicals business, but for now its fortunes are strongly tied to Tru Niagen. So at the moment it's a fairly limited healthcare business. Potential investors should keep an eye on how that pipeline develops.
