Buyout Buzz Boosts Sarepta; JAZZ Stock Jumps After Earnings

GNC is pacing toward a big weekly gain

Feb 27, 2019 at 3:31 PM
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Stocks are trading lower today after U.S. Trade Representative Robert Lighthizer's congressional testimony. Among individual names making notable moves are drugmakers Sarepta Therapeutics Inc (NASDAQ:SRPT) and Jazz Pharmaceuticals PLC (NASDAQ:JAZZ), as well as nutritional supplements retailer GNC Holdings Inc (NYSE:GNC). Here's a quick look at what's moving the shares of SRPT, JAZZ, and GNC.

Sarepta Therapeutics Jumps After Myonexus Therapeutics Buyout

Sarepta Therapeutics stock is up 9.7% to trade at $153.65 today, after the company exercised a buyout option for Myonexus Therapeutics Inc and reported positive data for the biotech's limb-girdle muscular dystrophy (LGMD) gene therapy treatment. SRPT shares are now up almost 41% year-to-date, and have erased their fourth-quarter loss.

Nevertheless, the weekly 3/1 135-strike put is most active today, and it looks like new positions are being purchased here. While it's possible some of the activity here is a result of traditional bearish betting, it could also be due to shareholders protecting paper profits with an options hedge.

BMO Set a Lofty Jazz Pharmaceuticals Price Target

Jazz Pharmaceuticals last night reported adjusted fourth-quarter earnings of $3.64 per share, more than analysts were expecting. In response, the shares were last seen up 9.1% at $139.37.

Analyst reaction has been mostly bullish. BMO boosted its price target to $206 from $199 -- a 61% premium to last night's close -- and Cantor Fitzgerald reiterated its "overweight" rating and $185 price target, waxing optimistic on the company's hemo/oncology business and soon-to-expire share buyback program. H.C. Wainwright, on the other hand, cut its JAZZ price target to $153 from $161.

Overall, most analysts are upbeat toward JAZZ stock, with 12 of 15 maintaining a "buy" or better rating, and not a single "sell" on the books. Plus, the average 12-month price target of $172.61 stands at a 24.3% premium to current trading levels.

GNC Stock Bucks Weight Watchers Headwinds

GNC stock is shrugging off stiff headwinds from Weight Watchers (WTW), trading up 3.5% at $3.29. This bring's the equity's week-to-date gain to 12%, with yesterday's 6% pop fueled by a positive earnings reaction for Vitamin Shoppe (VSI). However, GNC is running out of steam at its 200-day moving average, which hasn't been toppled on a closing basis since Nov. 9.

Options are running hot, with 5,130 puts and 1,250 calls traded -- four times what's typically seen. The March 5 put has seen the heaviest volume, and it looks like new positions are being bought for a volume-weighted average price of $1.65. If this is the case, breakeven for the put buyers at the close on Friday, March 15, is $3.35 (strike less premium paid).

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