Flexion Therapeutics Stock Hits New Lows on Guidance

Three analysts slashed their price targets and one downgraded FLXN stock

Deputy Editor
Jan 4, 2019 at 10:01 AM
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Flexion Therapeutics Inc (NASDAQ:FLXN) stock is down 3.2% at $11.94 in early trading, and touched a two-year low of $10.98 out of the gate, after the company announced sub-par full-year revenue guidance -- sparking a round of negative analyst attention. Specifically, Benchmark downgraded FLXN to "hold," while Berenberg cut its price target to $28 from $42, BMO cut its target to $34 from $36, and Needham dropped its target to $36 from $42.

The shares of FLXN have been sliding since their mid-June peak of $29.10. Flexion Therapeutics stock gave up nearly 40% in the fourth quarter, in fact, with recent rebound attempts halted by its 50-day moving average.

Prior to today, FLXN still enjoyed five "strong buy" ratings, with not a single "hold" or "sell" in sight. Plus, the current consensus 12-month price target of $32.13 represents a premium of more than 150% to current levels. Additional downgrades or price-target cuts for underperforming FLXN could exacerbate selling pressure on the shares.

Options bears have already been flocking to FLXN, though, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.81 sitting in the high 97th percentile of its annual range. This indicates that short-term option players have rarely been more put-heavy during the past 12 months.

What's more, the 9.44 million shares of FLXN sold short represent an impressive 30.2% of the stock's available float. At the security's average daily trading volume, it would take almost three weeks for traders to repurchase these pessimistic positions. However, as long as FLXN remains in its channel of lower highs and lows, it's unlikely the shorts will hit the exits.


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