A hot ASX stock with 'multiple catalysts' looming is 8% down. Time to buy

The Blackwattle team is still bullish on these pharmaceutical shares despite a recent sell-off.

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It's funny to call an ASX stock that's rocketed 217% in the past year a "bargain".

But that's precisely the situation we have with Neuren Pharmaceuticals Ltd (ASX: NEU), according to the experts at Blackwattle.

Let's check out their rationale:

'A pause for breath'

The Neuren share price has plunged 8.2% since late December.

But the simple fact is that the Blackwattle team is not worried.

"Neuren fell 5% in January, which we saw as a pause for breath, after rising 115% over the previous 3 months," read its memo to clients.

The steep climb in the preceding quarter was due to multiple factors.

"The rise over the previous three months was driven by the release of strong revenue growth from Daybue, their sole approved drug treating Rett Syndrome in the US and positive phase 2 trial results for their new drug NNZ-2591."

The new drug development is critical in the Blackwattle team's continued bullishness.

"The phase 2 results for NNZ-2591 were particularly exciting and provide strong confidence for NNZ-2591 to progress towards a phase 3 trial."

A huge 2024 expected for this ASX stock

Blackwattle experts are far from the only ones not at all put off by either the massive rise in the past year or the diving stock price over the past six weeks.

Broking platform CMC Invest shows all five analysts covering Neuren still rating the stock as a buy.

"We continue to retain a large position in the company given the multiple value accretive upcoming catalysts in 2024," read the memo.

"The key drivers for the portfolio tend to be fundamental company updates which give high quality companies the opportunity to demonstrate their ongoing strength and the market can reassess the outlook and what to pay for it."

Neuren Pharmaceuticals is scheduled to release its preliminary financial results on 23 February.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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