BTIG Targets 50% Upside for 2 Gene Editing Stocks

NTLA is still headed toward a third straight weekly loss

by Karee Venema

Published on Feb 8, 2019 at 11:27 AM

BTIG is chiming in on healthcare names today, and for gene editing stocks Editas Medicine Inc (NASDAQ:EDIT) and Intellia Therapeutics Inc (NASDAQ:NTLA), this resulted in fresh "buy" ratings and impressive price targets. Both EDIT and NTLA are capitalizing on the bull notes, though the latter is still pacing toward a third straight weekly loss.

EDIT Put Options Have Gained in Popularity

At last check, Editas Medicine is trading up 1.3% at $19.69. The stock has been trending lower since its March 9 record high of $45.02, with a recent rally off its Dec. 24 16-month low of $17.80 running into a wall at its 80-day moving average. Since then, the shares gapped 20% lower on Jan. 22 in the wake of a C-suite shakeup, and plunged 7.9% yesterday after disappointing trial data from a pair of biotechs.

edit stock daily chart on feb 8

Nevertheless, BTIG set a $30 price target on EDIT stock -- a 55% premium to last night's close. This bullish bias is shared by the broader analyst community, but options traders have taken a more bearish stance toward the equity.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.43 ranks in the 82nd annual percentile, meaning puts have been bought to open relative to calls at a quicker-than-usual clip. The January 2020 12.50-strike put is home to peak open interest, and data from Trade-Alert suggests the bulk of these options were purchased.

NTLA Stock is Stuck Between Key Technical Levels

For Intellia Therapeutics, BTIG set a price target of $20, representing expected upside of 56.4% to Thursday's close. After falling as much as 0.7% earlier, NTLA stock has since swung up 2.3% to trade at $13.08. The shares remain down 60% from their Sept. 20 annual high of $32.95 and are headed toward a third straight weekly loss, and have recently been stuck between support near $12.70 and resistance at their 40-day moving average.

ntla stock daily chart on feb 8

Analysts are mostly upbeat when it comes to NTLA. While four of seven maintained a "buy" or better rating at last night's close, the average 12-month price target of $39.79 is a 207.3% premium to current trading levels.

Short sellers, on the other hand, have been actively targeting Intellia Therapeutics. Short interest jumped 20.3% in the two most recent reporting periods to a record 7.41 million shares. This represents a healthy 23.8% of NTLA's available float, or 11.9 times the average daily pace of trading.

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