Investing.com -- Mizuho updated its Top Picks list for October in a note Thursday, adding Harmony Biosciences and Fortive (NYSE:FTV) Corp as the newest high-conviction ideas.
The Top Picks list, which includes 24 stocks across six sectors, reflects Mizuho's analysts' most "differentiated ideas" and is refreshed monthly to showcase favored investment opportunities.
Harmony Biosciences (HRMY), an orphan central nervous system (CNS) disease-focused company, made the list due to its strong commercial execution and promising prospects for its lead asset, pitolisant (Wakix), which treats narcolepsy.
Mizuho highlighted Harmony's transformation from a "one product, commercial-stage specialty pharma-like company" to a more dynamic biotech-like firm with multiple growth avenues.
"While we currently only model three revenue contributors, left unmodeled are as many as eight opportunities," the firm stated.
This shift, along with potential positive clinical data readouts by the end of 2025, positions the company for a possible re-rating over the next 12 months.
Fortive Corp . (FTV), on the other hand, has attracted attention with its plan to spin off its Precision Technologies segment. This tax-free spin-off will create two independent publicly traded companies, each with "separate/focused business models" and tailored capital strategies.
Mizuho sees this move as a significant opportunity for Fortive, particularly given the company's emphasis on stock buybacks, which could help mitigate perceived risks.
"The SOTP [sum-of-the-parts valuation] is too attractive to ignore," Mizuho added, setting a price target of $90 for Fortive.
Furthermore, they said, "CEO and CFO succession brings a fresh set of eyes to the driver's seat, paving a new path forward."