Key Highlights

● Truist reinstated Alkermes coverage at Buy with a $55 price target.

● Truist's reasoning was not detailed, and no closing move for Alkermes was reported.

● Alkermes markets medicines for schizophrenia, bipolar disorder and addiction.

● Abbott, Danaher, Thermo Fisher and Elevance report Oct 21, and the Fed decides Oct 28.

Truist returns with a Buy

Alkermes (NASDAQ:ALKS) drew attention on Friday after Truist Financial (NYSE:TFC) reinstated coverage at Buy with a $55 price target, according to analyst-call roundups. A reinstatement typically follows a period in which a broker has suspended its rating, often because of an advisory role or a change in the analyst covering the stock.

The available summaries did not detail Truist's reasoning, and no closing move for Alkermes shares was reported. The call still stood out on a day when broker actions were a key source of company-specific news across the market.

Alkermes is a drugmaker focused on neuroscience. It markets medicines for conditions including schizophrenia, bipolar disorder and addiction, and it has been developing treatments for sleep disorders such as narcolepsy. Unlike many smaller drug developers, it has an established commercial business, which means its revenue does not depend solely on future trial outcomes.

A day of initiations and resets

Truist's call was one of a cluster of coverage changes on Friday. JPMorgan initiated Praxis Precision Medicines (NASDAQ:PRAX), another neurology-focused company, at Overweight with a $700 target. Macquarie began coverage of six aerospace and defense names at Outperform, including CACI (NYSE:CACI), Kratos (NASDAQ:KTOS) and Karman (NYSE:KRMN). CIBC initiated Constellation Energy (NASDAQ:CEG) at Outperform with a $358 target, and StoneX began Toll Brothers (NYSE:TOL) at Buy.

Truist was also active elsewhere. It raised its price target on Travelers (NYSE:TRV) to $435 after the insurer's third-quarter report, according to a published headline. And the bank itself was in the news, reporting quarterly results and disclosing the sale of $7.7 billion of LightStream loans to Carlyle (NASDAQ:CG).

Health care split in two

Friday's session highlighted a divide within health care. Large, cash-generating health care stocks held up well, and market reports showed that the health care sector fund hit records as investors rotated into defensive sectors. McKesson (NYSE:MCK) set an intraday record high, market data showed.

Smaller clinical-stage names did not share in the gains. Market commentary described a rate-driven selloff in long-duration biotech, with Novavax (NASDAQ:NVAX), PacBio (NASDAQ:PACB), Ocular Therapeutix (NASDAQ:OCUL) and QuidelOrtho (NASDAQ:QDEL) among the decliners. Moderna (NASDAQ:MRNA) tumbled ahead of Phase 3 data later this month, market reports said. The 10-year Treasury yield eased to roughly 5.1 on Friday, but it reached its highest level since 2002 earlier in October.

For a company like Alkermes, with marketed products, the question for investors is often which side of that divide it sits on.

A tech-led retreat

The broader market was weighed down by technology. The Nasdaq Composite fell 572.99 points to 26,140.03, its worst week since June, according to market data. The S&P 500 dropped 84.62 points to 7,659.44, and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. The Russell 2000 lost 45.90 points to about 2,721.

Chip and software stocks led the decline as investors questioned how the AI build-out will be financed. Energy, utilities and consumer staples finished higher.

Alkermes Pipeline and Health Care Reports

The Federal Reserve's next decision is due Oct 28, followed by PCE inflation data on Oct 29. Fed Chair Kevin Warsh said in Bangkok: "I don't prejudge meetings." Shifts in yields around those dates will influence drug stocks across the Nasdaq Composite.

Large health care peers report next week, including Abbott (NYSE:ABT), Danaher (NYSE:DHR), Thermo Fisher (NYSE:TMO) and Elevance (NYSE:ELV) on Oct 21, which could set the tone for the sector. For Alkermes, investors will be looking for updates on its pipeline and the performance of its marketed medicines when it next reports.