Raymond James Spot-On With Aerie Pharmaceuticals Recommendation

Wall Street analysts sometimes get things right and sometimes they don't.

When it comes to Raymond James' call on Aerie Pharmaceuticals Inc AERI, the firm nailed it. Before Wednesday's open, the firm initiated coverage on the issue with a Strong Buy and $48 price target.

Investors took note of the recommendation as the issue added $1.48 to end Wednesday's session at $21.13, up from $19.65.

It's hard to determine whether or not the firm was speculating on the outcome of Phase 3 trial of Roclatan that was supposed to be released sometime this month. But whatever their reasons, the news released after Wednesday's close make the firm look like geniuses.

Related Link: Aerie Rips 60% After Positive Roclatan Phase 3 Topline Efficacy Results

After the close, the company announced positive Roclatan Phase 3 topline efficacy results and that the drug has met its primary endpoint.

As a result, momentum traders piled into the issue, taking the issue over $34 in after-hours trading. The rally continued in this morning's pre-market session as the issue made a new all-time high at $36.74, exceeding its former all-time high from April 2015 at $35.89.

However, after reaching that elevated level there has been some profit-taking in the issue. In fact, it rallied only $0.17 off its opening print to $34.69, over $1 from its all-time high before reversing course and falling to $33 area, which is still a $12 gain from Wednesday's close.

As always, when it comes to investing in the markets -- especially in the pharmaceutical sector -- timing is everything. For investors that followed Raymond James lead, the timing could not have been any better.