Baird: Buy This Biotech Before Data Release

AXGT stock is facing off against multiple layers of resistance

by Lillian Currens

Published on Aug 12, 2019 at 2:59 PM

Axovant Gene Therapies Ltd (NASDAQ:AXGT) is getting a boost from Baird today -- bucking the broad-market trend lower -- after the analyst upgraded the biotech to "outperform" from "neutral," predicting potential tailwinds from upcoming gene therapy studies, expected in the fourth quarter. On the other hand, Baird also trimmed its price target to $13 from $16. The mostly positive update has AXGT recouping Friday's post-earnings losses, with the shares last seen up 11.2% at $7.04 -- trading near the top of the Nasdaq.

Baird isn't the only analyst talking about the pharma stock today. Guggenheim reduced its price target to $45 from $47 -- still well above AXGT's current perch. That being said, the consensus 12-month price target of $22 is more than triple current levels. Plus, the majority of analysts following the equity call it a "strong buy." 

While absolute volume runs light, during the past 10 weeks, 8.55 AXGT calls have been bought for every put on the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), suggesting a penchant for bullish bets of late. Short interest has waned too, down 22.9% in the last two reporting period, which could mean some of these bears are concerned about a breakout for AXGT. 

While Axovant stock has managed a roughly 85% rebound since bottoming out at a record low of $3.81 in mid-June, the stock's 80-day moving average has emerged as resistance. In fact, the security squared up against this trendline earlier today, and hasn't finished north of here since early April. In addition, the $8 region has contained recent rebound attempts, as this area is in line with AXGT's year to-date breakeven. 

AXGT Chart Aug 12


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