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Drug Stock Soars After Strong Alzheimer's Study Data

This could be DAL's worst day since 2012

Managing Editor
Jan 3, 2019 at 3:24 PM
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Stocks are heading toward sharp losses today, as Apple's (AAPL) weak forecast puts a damper on the new year. Airliner Delta Air Lines, Inc. (NYSE:DAL) and auto stock General Motors Company (NYSE:GM) are lower, while drugmaker BioXcel Therapeutics Inc (NASDAQ:BTAI) is soaring. Below, we'll take a look at the news moving the shares of DAL, GM, and BTAI.

DAL Stock Hits New Lows After Unit Revenue Growth Warning

Delta Air Lines shares were last seen down 8.3% at $45.91, and earlier fell to a 15-month low of $45.08, after the airliner slashed its estimate for fourth-quarter unit revenue growth to 3%, down from the previously forecast 3.5%. In response, Cowen and Company trimmed its price target to $65 from $68. 

As a result, DAL stock is heading toward its worst day since June 2012. Even prior to today's freefall, the shares had been spiraling since their Nov. 30 record high of $61.32, ushered by their 10-day moving average, with a mid-December revenue warning exacerbating the losses. Year-over-year, the airliner has now shed 17.7%.  

Today's bear note from Cowen could be the first of many. Currently, all 13 of the brokerages covering DAL rate it a "buy" or better, while its average 12-month price target of $68.74 is a 50% premium to its current perch.

Dreary Vehicle Sales Stats Stall GM

For General Motors, the stock is down 3.5% to trade at $32.46, dragged lower after the company said U.S. new vehicle deliveries dropped 2.7% in the fourth quarter. GM shares are fresh off their worst month since January 2016 -- shedding 11.9% in December -- a period in which their 20-day moving average kept a lid on any breakout attempts. 

Analysts have yet to be swayed, though. Exactly 70% of brokerages covering GM rate it a "buy" or better, with zero "sells" on the books. And the stock's average 12-month price target of $45.09 sits all the way up in territory not reached in nearly a year. 

Analyst Targets 313% Upside for Soaring BTAI Stock

On the brighter side of things, BioXcel Therapeutics stock is up 41.8% at $5.09, near the top of the Nasdaq today, after the drugmaker said its Alzheimer's treatment met its main goals in an early stage study. The data had Canaccord Genuity saying "under-the-radar BTAI presents [a] solid opportunity," with the brokerage firm reiterating its "buy" rating and $21 price target -- a 313% premium to current levels.

The drug received "fast-track" status from the Food and Drug Administration (FDA) a week ago, helping the stock break out of a pattern connecting lower lows since August. However, BTAI is stalling out in the $5.50-$5.75 region, home to half its March initial public offering price (IPO) of $11 and its 50-day moving average.

 
 

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