Karuna Therapeutics initiated with bullish view at Citi, here’s why

Citi analyst David Hoang initiated coverage of Karuna Therapeutics with a Buy rating and $291 price target. While noting shares are up 855% since the company went public in 2019, the stock has retreated from all-time highs of about $280 per share post-Phase 3 data last August and the firm “can discern no fundamental reasons for the pullback,” the analyst tells investors. The firm in its base case sees about 50% upside on first regulatory approval and positive Phase 3 ARISE data that supports future adjunctive labeling in schizophrenia and sees “low likelihood of an FDA rejection,” making the current level “an attractive entry point heading into 2024,” the analyst added.