GW Pharmaceuticals PLC (Nasdaq: GWPH) stock is up more than 50% over the past two days thanks to a bullish and bold call from Morgan Stanley.
The investment firm on Tuesday issued an "Overweight" rating on the U.K.-based company, a leader in cannabis-based drugs, and set an aggressive $103 price target on shares, more than double Monday's close.
Morgan Stanley's optimistic rating and sky-high price target sent shares up a whopping 32.19% to $60.86 on Tuesday. Volume was extremely heavy, with some 6,752,000 shares changing hands - more than thirteen times the stock's three-month average daily volume of 515,831.
Also stoking GWPH stock Tuesday were comments from CNBC's Jim Cramer.
"Shocked" by Morgan Stanley's daring call, Cramer said it was nonetheless a "timely" recommendation given the current marijuana stock craze. Cramer added the stock will quickly reach Morgan Stanley's target price and said GW is the top play in today's current marijuana stock obsession.
GW's strong stock momentum carried through to Wednesday, with shares rising more than 20% to $73.33 intraday. By mid-day more than 3 million shares had traded.
Adding fuel to GW's colossal gains Wednesday were bullish options activity and potential takeover chatter.
But, more on Morgan Stanley's call...
GW's (Nasdaq: GWPH) Promising Drug Pipeline
Morgan Stanley sees potential in GW's unique product pipeline and its "novel platform." The firm is particularly keen on GW's epilepsy drug Epidiolex, which has shown notable promise in a small yet growing set of data.
Epidiolex could generate worldwide sales of $1.35 billion and will make up 90% of GW's peak revenue, according to Morgan Stanley.
Additionally, U.S. sales of GW's Sativex, a treatment for multiple sclerosis (MS) spasticity and cancer pain, should also grow substantially, the firm predicted. "GW has multiple additional drugs in early stage development... that are not currently part of our valuation, but could be upside drivers over time," Morgan Stanley wrote in Tuesday's note to clients.
Other drugs in development include therapies for ulcerative colitis, schizophrenia, type 2 diabetes, and glioma (tumors that start in the brain or spine).
While Morgan Stanley touted GW's pharmaceutical offerings, the firm also highlighted GW's focus on medical marijuana treatments. Of particular mention was the uniform blend of elements and chemicals GW uses to create safe, effective medical marijuana in climate-controlled standard indoor glasshouses.
Indeed, GW's demonstrated consistency and predictability of doses has garnered the company an elevated status in the medical marijuana industry. Morgan Stanley noted GW has a stellar consistency standard and develops its drugs with strict adherence to FDA dosing guidelines.
Other Wall Street firms offering opinions on GW include Bank of America, Piper Jaffray, and Lerrink Swann. The consensus view among the trio is that the stock is a "Buy."
GWPH Stock: The Best "Pot" Play and Beyond
Undeniably, marijuana stocks have been on fire in 2014, amid fresh legalized recreational use in Colorado and Washington. Moreover, 21 states and Washington, D.C., have approved marijuana use for medicinal and therapeutic purposes.
As a result, a number of "pot" penny stocks have soared. Hemp Inc. (OTCMKTS: HEMP), Cannabis Science Inc. (OTCMKTS: CBIS), and Medical Marijuana Inc. (OTCMKTS: MJNA) have enjoyed gains of 559%, 255%, and 119% respectively.
But the best profit play in the legalized pot industry is indeed GWPH, according to Money Morning Defense & Tech Specialist Michael A. Robinson.
Robinson cited GWPH's prowess back in March, for the same reasons Morgan Stanley noted Tuesday.
"With its solid science, multiple uses for its main cannabis-based biotech product, and strong alliances with global drug leaders, GW Pharmaceuticals should leave investors rewarded," Robinson wrote.
In fact, Robinson detailed for investors why GWPH stock is such a great profit play in this field. Go here for the full story on GW Pharmaceuticals stock.
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