2 Earnings Moves to Watch Today In the Healthcare Sector

Shares of FOLD and MYL are making notable moves after earnings

by Josh Selway

Published on Nov 6, 2018 at 10:14 AM

Amicus Therapeutics, Inc. (NASDAQ:FOLD) and Mylan N.V. (NASDAQ:MYL) both reported third-quarter earnings yesterday evening, and analysts are reacting to the numbers. Below is a brief breakdown of this morning's trading action around shares of FOLD and MYL.

FOLD Stock Down After Earnings

Starting with Amicus, investors are picking through the numbers for the company's Fabry disease drug, Galafold. A company executive said the drug's launch has "exceeded our expectations," but the stock is down 6% at $11.15 all the same, on an earnings and revenue miss. FOLD shares certainly need a lift. They've been trending lower since a June high around $17.60, bottoming at a 52-week low of $10.33 late last month. Moreover, the 50-day moving average has been a stiff ceiling since July.

Analysts have remained bullish on the drugmaker despite this technical weakness. Five of the seven covering brokerage firms have "strong buy" endorsements, and the average 12-month price target among all of them is up at $18.50 -- three-year-high territory. However, J.P. Morgan Securities this morning cut its price target to $18 from $20.

Checking in on options data for Amicus Therapeutics, peak open interest resides at the April 2019 14-strike call, with more than 5,000 contracts open here. Next closest is the January 2019 22-strike call, which only holds 1,274 options. Regardless, it's possible some are speculating on long-term upside for FOLD stock.

MYL Shares Spike on Earnings Beat

Mylan stock has jumped 8.5% to $34.05, thanks to better-than-expected third-quarter earnings. Analysts were quick to respond, as both Morgan Stanley and Mizuho raised their price targets to $39, BMO slashed its price target to $46, and BofA-Merrill Lynch and RBC shelled out respective price-target cuts to $42 and $50 -- though the former upgraded its opinion to "buy." The shares still have a long way to go to recover their year-to-date loss, as they entered 2018 above $42. In fact, they just hit an annual low of $30.33 on Oct. 25. More recently, a brief breakout attempt was blocked by the 20-day moving average earlier this month, though the equity is set to close above this trendline today.

Even though the security has struggled in 2018, short interest is very low, limiting the possibility of short-covering tailwinds. By the numbers, just 2.5% of MYL's float is sold short.

And taking a quick look at options activity on the drug stock, long-term calls have been popular. Peak open interest is at the January 2019 40-strike call, followed by the 45-strike call in the same series.

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