By Peet Serfontein & Khumbulani Kunene
We initiate a long position with a target price of $5.50 and a stop-loss of $3.00.
Absci Corporation is a data-first generative AI drug creation firm that seeks to create better biologics for patients by combining AI and scalable wet lab technologies. The integrated Drug Creation platform unlocks the potential to accelerate time to clinic and increase the probability of success by simultaneously optimising multiple drug characteristics important to both development and therapeutic benefit.
Headquartered in Vancouver, Washington, Absci aims to revolutionise the biopharma industry by leveraging its innovative approach to unlock new possibilities in precision medicine.
Technically, the price is in a developing inverted head and shoulders pattern, as seen by the green lines on the insert. This pattern is a classic bullish reversal pattern, signalling that the stock's downward trend may be coming to an end and a potential upward movement is on the horizon. After an initial decline, the price rises slightly, forming the first low (left shoulder) before falling to an even lower level (the head). This is followed by another rise. The price declines again but forms a higher low, which forms the right shoulder and translates to weakening selling pressures.
The price is in a period of low volatility, which supports the bullish sentiment. Low volatility often reflects that selling pressure has diminished and may be a sign that downward momentum is losing strength.
Muted downside price momentum according to the MACD indicator, as well as the recent sideways trajectory of the On-balance volume (OBV) indicator, supports a bullish outlook.
Share Information
| Share Code | ABSI |
|---|---|
| Industry | Pharmaceuticals, Biotechnology |
| Market Capital (USD) | 0.42 billion |
| One Year Total Return | 178.68% |
| Return Year-to-Date | -9.76% |
| Current Price (USD) | 3.79 |
| 52 Week High (USD) | 6.72 |
| 52 Week Low (USD) | 1.11 |
| Financial Year End | December |
| The stock remains below its 200-day simple moving average (SMA) of $4.35. | |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | -1.20 | -0.83 | -0.66 | -0.57 |
| Growth (%) | 31.17 | 20.34 | 13.98 | |
| Dividend Per Share (USD) | - | - | - | - |
| Growth (%) | - | - | ||
| Forward PE (times) | - | - | - | |
| Forward Dividend Yield (%) | - | - | - | - |
| Loses are expected to narrow in the medium term - presenting an opportunity for growth in the long term. | ||||
Rationale
Technical Analysis:
Fundamental view:
| Share Name and Position | CCL US - Early Exit (Close the position) |
ETN US - Buy (Continue to hold) |
RJF US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 18.03 | 297.69 | 117.74 |
| Current | 20.39 | 336.94 | 126.74 |
| Movement | +13.1% | +13.2% | +7.8% |
| We exit the trade early to limit portfolio risk. |
A price that gave a "buy" signal on the Bollinger Bands remains of interest. Remains above its 200-day simple moving average. Upside momentum supports the strategy.
Our profit target remains at $352 with a trailing stop-loss at $315.30. Exit the trade by 13 December 2024. |
A developing broadening top pattern is of interest. Remains above its 200-day simple moving average. Upside momentum supports the strategy.
Our profit target remains at $132 with a trailing stop-loss at $120.60. Exit the trade by 6 December 2024. |
| Share Name and Position | FAST US - Buy (Continue to hold) |
BALL US - Buy (Continue to hold) |
LRCX US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 66.90 | 61.71 | 79.11 |
| Current | 69.99 | 64.47 | 82.06 |
| Movement | +4.6% | +4.5% | +3.7% |
|
A developing rising wedge pattern remains of interest Trading above its 200-day simple moving average. Fading upside momentum continues to be a concern.
Our profit target remains at $75 with a trailing stop-loss at $66.60. Exit the trade by 23 October 2024. |
A developing broadening bottom pattern remains of interest. Remains above its 200-day simple moving average. Fading upside price momentum continues to be a concern.
Our profit target remains at $69 with a trailing stop-loss at $61.60. Exit the trade by 7 February 2025. |
The start of Wave 5 out of the Elliott Wave price analysis remains of interest. Remains below its 200-day simple moving average. Fading downside momentum supports the strategy.
Our profit target remains at $97.30 with a trailing stop-loss at $74.20. Exit the trade by 27 December 2024. |
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