$11.5 Billion Deal Boosts QGEN Stock

The security is ripe for bull notes right now

Deputy Editor
Mar 3, 2020 at 10:16 AM
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The shares of German-based biotech name Qiagen NV (NYSE:QGEN) are soaring this morning, up 15.6% to trade at $41.75 after Thermo Fisher Scientific (TMO) agreed to buy the genetic testing company for $11.5 billion in order to strengthen its health diagnostic business. Evercore ISI added that "the assets will fit well together and make strategic sense." 

Since gapping higher in early February, QGEN appears to have found a floor at the 120-moving average, however, a recent ceiling at the $37.50 region has kept a tight lid on shares in recent weeks. Today however, the equity is toppling this level, and is pacing to close its late-December bear gap. Plus, Qiagen is looking to take back its year-over-year breakeven level today. 

There's plenty of room for upgrades among the brokerage bunch. Only three in coverage consider QGEN a "strong buy," compared to 11 who call it a "hold" or worse. Plus, the consensus 12-month price target of $35.50 is a roughly 15% discount to current levels. 

Short sellers, on the other hand, have already been jumping ship. Short interest is down 11.7% in the last reporting period and now represents just a slim 2.2% of the stock's available float. Over in the options pits things have been decidedly bullish as well, with 1,186 calls across the tape in the last 10 days, compared to just 102 puts. 

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