Wells Fargo upgraded Pulmonx shares to overweight from equal weight on Monday, noting that the company is gaining traction after a challenging period during the Covid pandemic. Analyst Larry Biegelsen raised his price target to $15 from $10, implying a 44.6% upside from Friday’s closing price. “The company’s Zephyr valves are supported by strong clinical evidence and favorable reimbursement, which we believe will drive robust adoption of this novel therapy into a large, underpenetrated market opportunity in severe emphysema,” Biegelsen wrote in a client note on Monday. Biegelsen noted that Covid had a disproportionately negative impact on Pulmonx, in particular, the company’s Zephyr valves, which are used as implants in treating the lung disease emphysema. Physicians were reluctant to implant Zephyr during the pandemic, as patients would have to stay for three nights at the hospital and reduce spaces for Covid patients, the analyst wrote. However, he said that Pulmonx’s fourth-quarter earnings represent a “turning point” for the company. The company posted revenue growth, with the U.S. growing 30% year-over-year to $9.5 million, according to Biegelsen. He added, “We were also encouraged by the increase in utilization at existing accounts and the growth in new accounts in Q4,” the analyst wrote. Wells Fargo also sees a significant upside in the Japanese market for the company. Pulmonx recently received approval for its Zephyr valves in Japan, which Biegelsen anticipated could amount to roughly another $1 billion for the company. Pulmonx shares gained 8% on Monday following the upgrade. Shares are up more than 33% year to date, but have slumped 54% in the past 12 months. —CNBC’s Michael Bloom contributed to this report.