The U.S. government just canceled a bulk order for 43,000 of Philip's EV300 ventilators
The shares of Netherlands-based health technology company Koninklijke Philips NV (NYSE:PHG) have taken a hit this morning, following news that the U.S. government just cancelled a bulk order of 43,000 EV300 ventilators, driving the firm to lower its 2020 earnings outlook. This move comes just a few months after a July report by the U.S. Congress House Subcommittee on Economic and Consumer Policy revealing that the White House overpaid for this order by at least $500 million, though the company denied any profiteering. At last check, PHG is down 3% at $47.78.
Despite July's dispute, PHG was able to overtake long-time pressure at the $50 mark to reach a fresh high of $54.28 on July 29. The stock has since cooled, dipping back below this region earlier this month. Now, the equity is looking to close back below its 70-day moving average -- a trendline that provided some support back in May. The stock is also testing its footing back at its year-to-date breakeven near the $48 level.
While only three analysts cover the medical stock, two give it a "strong buy" rating, compared to just one "hold." The 12-month consensus price target of $53.75, meanwhile, is a 13.1% premium to last night's close.
Short sellers have started piling on the stock. In fact, short interest rose 16.6% in the last reporting period. There's still plenty of room on the bearish bandwagon, however. The 1.19 million shares sold short make up a slim 0.1% of PHG's available float, or a little over two days at the stock's average pace of trading.