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2 Drug Stocks Gapping Lower After Earnings

Both Cowen and Stifel downgraded AKCA stock

Feb 27, 2018 at 9:28 AM
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Clovis Oncology Inc (NASDAQ:CLVS) last night reported an adjusted fourth-quarter loss of $1.27 per share on $17 million in revenue, with the latter number falling short of analysts' consensus estimate for $20.1 million in revenue. Wall Street was quick to chime in, too, with CLVS stock receiving price-target cuts from Barclays (to $85), BofA-Merrill Lynch (to $89), Stifel (to $110), and SunTrust Robinson (to $85). And though all of these price targets sit well above last night's close at $55.51, the shares are down 2.4% in electronic trading.

Just last week, Clovis Oncology shares rallied on positive signs for its ovarian cancer drug marketing application in the European Union (EU), but were quickly contained by their 60-day moving average. This trendline has kept a tight lid on CLVS stock since early November, with the stock now staring at a six-month deficit of nearly 25%.

There's still plenty of optimism priced into CLVS shares, though. Of the 12 analysts covering the biotech, 10 maintain a "buy" or better rating, while the average 12-month price target of $86.55 stands at a 55.9% premium to current trading levels.

Akcea Therapeutics Inc (NASDAQ:AKCA) also reported earnings last night, with the lipid disorder specialist reporting a fourth-quarter loss of 35 cents per share and revenue of $18 million. The results prompted downgrades to the equivalent of a "hold" at both Cowen and Company and Stifel, though BMO raised its price target to $30 from $25.

After closing last night at $22.58, AKCA stock is down 21.2% in electronic trading -- on track to open at its lowest point since mid-January. Short sellers were betting on a pullback, too. Short interest on Akcea Therapeutics stock shot up 48.4% in the two most recent reporting period to a record high 5.14 million shares. These bearish bettors will be sitting on the sidelines today, though, with the security all but certain to land on the short-sale restricted list.

 

 

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