Sliding Puma Biotechnology Stock Gets Rare Downgrade

Most of Wall Street remains very bullish on Puma Biotechnology

Apr 12, 2018 at 10:19 AM
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Puma Biotechnology Inc (NASDAQ:PBYI) exploded up the charts in 2017, more than tripling in value and peaking at $136.90 in early November. Since then, however, PBYI stock has suffered two bear gaps, the most recent of which from January came as a result of an unfavorable regulatory decision out of Europe.

The shares are under pressure again today after Barclays downgraded its opinion to "equal weight" from "overweight." The brokerage firm believes the main value drivers for the equity are already priced in, and it lowered its price target to $70 from $90 -- the lowest target on Wall Street, according to Thomson Reuters Eikon.

What makes this bear note even more notable is that fact that most covering analysts are extremely bullish. Coming into today, there were six brokerage firms with coverage on Puma Biotechnology, and five of them had "strong buy" ratings in place. Moreover, the average 12-month price target is $96, which is a 51.3% premium to PBYI's current perch.

At last check, the shares were trading down 3.7% at $63.68. They've been hampered by resistance from the 50-day moving average ever since the first bear gap back in November, but the $60 mark has seemingly stepped up as support since the January gap. The security bottomed at $60.10 earlier today.

As for options activity, volume has been light on an absolute basis, but recent data shows a strong tilt toward long calls. Specifically, PBYI has a 10-day call/put volume ratio of 8.81 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). And even with the stock sharply lower, many are speculating on a rebound, with buy-to-open activity already spotted today at the June 90 call.

 

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