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NEW YORK – Citigroup revised its stance on Larimar Therapeutics (NASDAQ: LRMR), upgrading the stock from Neutral to Buy, with a price target suggesting an impressive 284% upside potential. This optimistic outlook follows a notable increase in institutional investment in the biotechnology company, which is currently developing treatments for Friedreich’s ataxia (FA).
Institutional investors have significantly bolstered their positions in Larimar Therapeutics, which now owns more than 38 million shares across 154 funds. This marks a substantial increase in both the number of shares owned and the diversity of institutional sponsors. Among them, investment companies such as Deerfield Management and CHI Advisors are prominent shareholders, with stakes of 39% and 8% respectively.
Additionally, Verition Fund Management has recently increased its investment by 6%, demonstrating confidence in Larimar’s prospects. Similarly, Janus Henderson Group (NYSE:) increased its shareholding by 41%, despite a reduction in its overall portfolio allocation to Larimar by nearly 20%. Citadel Advisors also made adjustments, cutting its stake by 20% but increasing its portfolio allocation to the company by nearly 9%.
The increased interest from these institutional players comes as Larimar advances its lead compound, CTI-1601, through Phase 1 clinical trials. CTI-1601 is being investigated as a potential therapeutic agent for AF disease, a genetic condition debilitating condition for which there are currently limited treatment options.
Citigroup’s bullish upgrade reflects broader anticipation among investors that positive clinical developments could significantly boost Larimar’s stock value. As the company progresses with its trials, the market will be closely monitored for further updates on the efficacy and safety profile of CTI-1601, which could be critical to Larimar’s future growth trajectory.
InvestingPro Insights
In light of recent events, InvestingPro’s real-time data and advice offers valuable insights into Larimar Therapeutics. According to InvestingPro, the company has more cash than debt on its balance sheet and liquid assets that exceed its short-term obligations, indicating a strong financial position. However, the company has not been profitable in the last twelve months and analysts do not expect it to be profitable this year.
From a metric perspective, Larimar’s market capitalization stands at $144.45 million, with a P/E ratio of -4.33, reflecting the company’s current lack of profitability. The company’s shares have experienced significant profitability over the last week, with their price increasing by 34.29%. InvestingPro’s fair value for Larimar is $3.15, slightly up from its previous close of $3.09.
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