Pharma Stock Drops After Raymond James Rating

The equity is down over 26% year-over-year

Digital Content Manager
Aug 25, 2020 at 12:48 PM
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The shares of GW Pharmaceuticals PLC (NASDAQ: GWPH) are down 2.8% at  $103.34 this afternoon, after brokerage firm Raymond James initiated coverage of the security with a "market perform" rating. The analyst said that while launch fears have circulated the stock since its second quarter trading publicly, growth in the company's cannabidiol (CBD) -based epilepsy treatment Epidiolex is beginning to taper off. 

On the charts, the equity has experienced its fair share of ups and downs over the last few months. While shares dropped to four-year lows near the $67 mark back in March, they were able to close last November's bear gap, and touch an annual high of $141.98 on July 21, with support from the 40-day moving average. The security fell back below this trendline in early August, however, and is now struggling to overcome pressure at the $110 mark. Longer term, GW Pharmaceuticals stock carries a 26.6% year-over-year deficit. 


The majority of analysts were optimistic toward GWPH coming into today, with 12 of the 13 in coverage sporting a "buy" or better rating, and only one carrying a tepid "hold." Meanwhile, the 12-month consensus price target of $190.69 is a whopping 85.4% premium to current levels, meaning price-target cuts could very well be on the horizon. 

That upbeat analyst sentiment is reflected in the options pits, where calls are popular. The stock sports a 50-day call/put volume ratio of 4.36 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 92nd percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.

What's more, short interest is down 10.7% in the last two reporting periods. Still, the 3.92 million shares sold short make up 15.4% of the stock's available float, or more than two week's worth of pent-up buying power.


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