Jefferies predicts up to 500% upside for these two stocks with a "Strong Buy" rating

U.S. stocks experienced a strong comeback on Friday, with the S&P 500 index rising 1.59%, reversing a previous decline triggered by concerns about the impact of Donald Trump's tariffs on the world's largest economy.

Despite a difficult period for the biotech sector, Jefferies analyst Michael Yee sees opportunities for growth. According to his analysis, many biotech companies are trading below their cash value, presenting attractive investment opportunities for those who can identify the right catalysts, such as clinical trials, regulatory approvals and strategic launches.

Jefferies analysts have identified two biotech companies that have the potential to soar - one of which could jump as much as 500%.

Alto Neuroscience $ANRO

Alto Neuroscience is a clinical-stage biotechnology company focused on treating central nervous system (CNS) disorders and psychiatric diseases. It uses the principles of precision medicine to develop treatments for difficult-to-treat conditions such as depression, bipolar disorder and schizophrenia.

The company's key candidate is ALTO-300, an experimental antidepressant that is in a Phase 2b clinical trial. Alto expects to publish results in mid-2026. Other key drugs in development include ALTO-203 and ALTO-101, designed to treat anhedonia and cognitive deficits in schizophrenia.

Jefferies analyst Andrew Tsai sees great potential in Alto Neuroscience and rated the stock a "Buy" recommendation with a price target of $17, which would represent a 507% upside from the stock's current value.

Instil Bio $TIL

Instil Bio is a biotechnology company that originally developed tumor-infiltrating lymphocyte (TIL)-based therapies but has refocused its strategy on bispecific antibodies. In August 2024, the company entered into a partnership with China's ImmuneOnco Biopharmaceuticals, resulting in the licensing of two promising drugs.

The most interesting of these is SYN2510, a PD-L1xVEGF bispecific antibody. Studies are underway in China, where it is being tested in patients with lung cancer and triple-negative breast cancer. Expected clinical results in the second half of 2025 could have a large positive impact on the share price.

Jefferies analyst Kelly Shi gave Instil Bio a "Buy" rating and a $52 price target, implying a potential upside of 158%.

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Source: Tipranks