Analyst Thinks This Pharma Stock Could Lose 60%

The analyst started BOLD stock with an underperform rating

Deputy Editor
Oct 3, 2019 at 11:32 AM
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Drugmaker Audentes Therapeutics Inc (NASDAQ:BOLD) is down 1.4% at $27.32 today, after Baird initiated coverage on the stock with an "underperform" rating. The analyst also slapped BOLD with a $10 price target, which is roughly a 64% discount to last night's close of $27.69, and would represent a new record low for the stock. 

Generally, analysts have been quite bullish on the pharma name. Prior to today, nine in coverage called BOLD a "buy" or better, while only two said "hold" or worse. What's more, the stock's consensus 12-month price target of $43 sits near its June 2018 all-time peak, and holds a 57.7% premium to current levels. 

While the security is still up 28.7% for the year, it has lost about 31% since running out of steam at the $40.50 region in late July. The 40-day moving average contained BOLD's last attempt at a rally. Now, it's testing support at the $26 area -- near where the equity was trading prior to a February bull gap.

BOLD Oct 3

In the options pits, traders have tended toward bearish bets, with 4.13 long puts bought for every call in the past 10 weeks. This is echoed in the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.06, which sits in the 90th percentile of its annual range, suggesting short-term options players have rarely been more put-heavy during the past 12 months. 

Short sellers have been upping the bearish ante too, with short interest rising 5.4% in the last two reporting periods, to 2.03 million shares sold short. This represents a healthy 7.3% of the stock's available float, and nearly a week's worth of buying demand, at its average pace of trading. 

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