The brokerage firm slashed its PBYI price target by 67%
Goldman Sachs downgraded Puma Biotechnology Inc (NASDAQ:PBYI) stock to "sell" from "neutral," and slashed its price target to $8 from $24 -- a 20.6% discount to last night's close. The brokerage firm expressed concern over slowing Nerlynx sales growth, and said the potential risk from Seattle Genetics' (SGEN) breast cancer treatment is "underappreciated" on Wall Street.
In reaction, PBYI stock is down 15% at $8.57, within striking distance of its Aug. 5 record low at $8.45. Since topping out at a year-to-date high of $43.90 on March 18, the shares have surrendered more than 80% -- mostly due to a mid-May bear gap sparked by dismal Nerlynx sales data. More recently, the equity had been struggling near the round $10 region, currently home to its 80-day moving average.
Options traders have been bracing for more downside. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PBYI's 10-day put/call volume ratio of 3.58 registers in the 99th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.
This skepticism is seen elsewhere on Wall Street, with nearly 27% of Puma Biotechnology stock's float controlled by short sellers. Plus, all seven analysts covering the biotech maintain a "hold" or worse recommendation. However the average 12-month price target sits all the way up at $16.63, leaving room for more bear notes to come down the pike -- which could ramp up pressure on the embattled biotech.