Clear Street moved Korro Bio Inc. (NASDAQ:KRRO) to a Buy recommendation from Hold on Tuesday and lifted its price objective to $18.00 from $10.00 following the company’s recent analyst day discussion of KRRO-121, a candidate targeting hyperammonemia.
The upgrade reflects Clear Street’s assessment that KRRO-121 addresses an unmet clinical need and is supported by a strong scientific rationale, according to the firm. The analyst who had kept a Hold following the January analyst day, Bill Maughan, had awaited additional information before changing his view; Clear Street’s update indicates that subsequent analysis has shifted the balance in favor of an upgrade.
Clear Street emphasized that additional validation of the mechanism in improving urea cycle disorders could generate value opportunities, potentially by 2027. At the same time, the firm was clear that important clinical risks remain for the program and that meaningful de-risking will be required as development progresses.
On the competitive front, Clear Street noted that alternatives outside of KRRO-121 are not likely to materially advance treatment for non-OTC-deficient urea cycle disorders within a meaningful timeframe, a factor that influenced its view of the stock’s upside potential.
The firm concluded that, given current trading levels, Korro Bio’s risk/reward profile is tilted in favor of investors.
Other research shops have updated their views since KRRO-121 was introduced. H.C. Wainwright upgraded Korro Bio from Neutral to Buy and set a $20.00 target. Piper Sandler raised its recommendation from Neutral to Overweight and substantially increased its price target to $30.00 from $11.00. Chardan Capital Markets also moved to Buy and raised its price objective to $15.00, noting a strategic shift toward the KRRO-121 program, which is expected to enter clinical trials in late 2026.
Not all firms shifted to a bullish stance. Raymond James and William Blair both reiterated Market Perform ratings. Raymond James highlighted ongoing challenges for patients with Urea Cycle Disorders, while William Blair characterized the preclinical data for KRRO-121 as an "incremental positive" for the company.
These analyst actions follow setbacks tied to Korro Bio’s earlier AATD program and represent a possible new strategic direction centered on KRRO-121.
Key takeaways
- Clear Street upgraded Korro Bio to Buy and raised its price target to $18.00 after reviewing KRRO-121.
- Several firms raised ratings and price targets on Korro Bio, while Raymond James and William Blair maintained Market Perform.
- The company is shifting focus toward KRRO-121 after challenges with its prior AATD program; KRRO-121 is expected to reach clinical trials in late 2026, according to one firm.
Impacted sectors: Biotechnology, healthcare, small-cap equities.
Risks and uncertainties
- Significant clinical de-risking remains for KRRO-121, and successful clinical outcomes are not yet demonstrated.
- Competition and the broader therapeutic landscape could change, though Clear Street judged competitors are unlikely to advance treatment for non-OTC-deficient urea cycle disorders in the near term.
- Prior setbacks with the company’s AATD program underscore execution and development risks inherent to early-stage biopharma.