Biogen Stock Moves Higher After Q2 Earnings Beat

Call traders are getting in on the action today

Digital Content Manager
Jul 22, 2020 at 10:06 AM
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The shares of Biogen Inc (NASDAQ: BIIB) are up 1.8% at $285.23 this morning, after the multinational biotechnology company reported second-quarter profits of $10.26 per share on 3.68 billion in revenue, significantly higher than Wall Street's estimated $8.03 on $3.43 billion. The company attributed the impressive results to an increase in sales of its multiple sclerosis treatment Tecfider, leading it to raise its 2020 earnings forecast.

On the charts, BIIB has experienced its fair shares of ups and downs in 2020, as it fights with its year-to-date breakeven level. After hitting an annual peak of $374.99 on February 5, shares dropped to the $257 level by June. And while shares have been supported by the equity's 10-day moving average over the past few weeks, the stock has recently found overhead pressure at the $295 mark. Nonetheless, BIIB sports a 16.8% year-over-year lead.

Analysts were hesitant toward BIIB coming into today, with 18 of the 25 in coverage carrying a tepid "hold" or worse recommendations. However, the consensus price target of $297 is a 4.3% premium to current levels, implying there is room for price-target hikes that could serve as tailwinds to the equity.

In the options pits, however, calls are clearly preferred. In the last 10 days, 1.92 calls were bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 84% of readings from the past year, meaning calls are being picked up at a faster-than-usual clip.

Today, options volume in general is ramped up. In just the first hour of trading, over 3,500 options have changed hands, double the average intraday amount. Most popular so far is the weekly 7/24 300-strike call. Buyers of this contract are banking on an extended push from BIIB through the end of this week, when the options expire.

 

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