ANRO Stock Drops 7% After Disappointing Schizophrenia Study Results – But Analyst Sees Dip As Attractive Entry Point

• H.C. Wainwright said the failure of ALTO-101 in its Phase 2 study does not change its overall view on Alto Neuroscience.
• Baird cut Alto’s price target to $38 from $41 but said the company’s depression pipeline remains the key driver of its valuation.
• Jones Research’s latest price target implies a potential 100% upside to the stock’s current price.

Shares of Alto Neuroscience (ANRO) slid about 7% on Thursday after disappointing results from a schizophrenia treatment study prompted multiple brokerages to become more cautious on the stock.

On Wednesday, Alto Neuroscience said its experimental schizophrenia drug ALTO-101 failed to meet key goals in a Phase 2 Proof-of-Concept study. ALTO-101 did not show meaningful improvements in brain activity or cognitive measures compared to placebo.

As a result, the biotech firm will not continue developing the drug for this use and will shift focus to other programs, including ALTO-207 for treatment-resistant depression. The company is also exploring partnership opportunities for a modified version of ALTO-101 that showed better safety and drug behavior.

Analyst Sees Pullback As Attractive Entry Point

Jones Research cut Alto Neuroscience’s price target to $44 from $49, but kept a ‘Buy’ rating, according to The Fly. This implies a potential 100% upside to the stock’s current price of around $22.

Analyst Justin Walsh said that while the stock’s weakness is justified, the market is underestimating Alto’s broader pipeline and sees the pullback as an attractive entry point.

H.C. Wainwright said the failure of ALTO-101 in its Phase 2 study does not change its overall view on Alto Neuroscience, as the program was not a key part of its valuation, according to The Fly. The brokerage also highlighted the company’s strong cash position of $275 million, which supports its pipeline. H.C. Wainwright maintained its ‘Buy’ rating and $50 price target.

Baird cut the company’s price target to $38 from $41 and maintained an ‘Outperform’ rating. Analyst Brian Skorney called the ALTO-101 Phase 2 failure disappointing, though expectations were already modest given the challenges in schizophrenia treatment. The firm said Alto’s depression pipeline remains the key driver of its valuation.

How Did Retail Traders React?

Despite the intraday decline, retail sentiment for ANRO on Stocktwits turned ‘bullish’ from ‘neutral’ a day earlier, amid ‘extremely high’ message volumes.

One user had expected a bigger drop.

Year-to-date, the stock has gained more than 20%.

Read also: SNBR Stock On Track To Decline For 12th Straight Session – Retail Sees Buying Opportunity If Stock Dips Below $1

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