Bearish Brokerage Note Wallops bluebird bio Inc (BLUE)

bluebird bio Inc (NASDAQ:BLUE) was met with a mixed round of analyst attention

by Karee Venema

Published on Oct 14, 2016 at 12:21 PM

bluebird bio Inc (NASDAQ:BLUE) has slumped 10.3% to trade at $58.46, after Cantor Fitzgerald downgraded the biotech stock to "sell" from "hold," and lowered its price target to $37 to $42. Yesterday, bluebird bio said its new manufacturing process for its gene therapy treatment, LentiGlobin, could delay future trials until 2018. As such, the brokerage firm said BLUE stock is likely to encounter "selling pressure," given the lack of current catalysts to help lift the shares.

However, not everyone is as pessimistic toward BLUE. In fact, the stock received price-target hikes from BTIG (to $83) and Leerink (to $80), both in territory not charted since a bear gap in early December. Plus, most analysts are already optimistic toward BLUE, with 79% maintaining a "strong buy" rating, and the average 12-month price target of $86.31 standing at a roughly 48% premium to current trading levels.

This optimism isn't seen everywhere, though. Nearly 9 million BLUE shares are sold short -- a chip-shot away from the record high 9.1 million shares seen in early July. This equates to more than one-quarter of the security's available float, or 5.9 times BLUE's average daily pace of trading.

On the charts, BLUE has added nearly 68% since skimming annual-low territory near $35 in mid-May. Nevertheless, the shares of bluebird bio Inc (NASDAQ:BLUE) have run into stiff resistance near the $75 mark -- currently home to their 30-month moving average.

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