Targacept (NASDAQ:TRGT) Valuation Low Says Needham

Needham & Company said they believe the valuation of Targacept (NASDAQ:TRGT) is low based on TC5214 in depression and their work in the inflammation segment as well.

Needham said, "Management provided an overview and update of the company pipeline and platform yesterday at an investor meeting in NYC. We are incrementally more positive on TC5214 commercial positioning in the depression space and, although still early, we believe the company’s efforts in inflammation may prove to be an important value-driver in the long-term. Current valuation is low in our opinion (EV $360MM), given strength of the TC5214 program and depth of the NNR pipeline in cognition and inflammatory disease...We expect the stock to appreciate in 2011 as TC5214 results approach (YE11), with modest volatility in the interim tied to events from the cognition pipeline."

Targacept closed Friday at $21.92, down by $0.07, or 0.32 percent. Needham has a price target of $32 on them and maintains a "Buy" rating.