Jefferies starts Allurion at buy, cites weight-loss balloon device (NYSE:ALUR)

Jefferies has initiated coverage of Allurion Technologies (NYSE:ALUR) with a buy rating, citing the company’s unique weight-loss device.

The investment bank noted that the device, a balloon that is swallowed, doesn’t require a surgical procedure. The device is used with the company’s proprietary behavioral change program, an AI-powered digital therapeutic and remote patient monitoring.

Jefferies also highlighted that the company has broad patent coverage, “strong” clinical data and increasing brand awareness, all of which create “high barriers to entry.”

“Allurion’s affordability, low risk, high compliance and sustainable results stand out vs. alternatives including GLPs and surgery. Plus Allurion could be used alongside other treatments or as a bridge to them,” Jefferies analysts added.

Jefferies said it sees a pathway for the company to achieve profitability in around two years, but added it will likely need to raise more capital in the next year to fund operations.

Jefferies set its price target for the stock at $5.