Bulls Blast Biotech Stock Before Earnings

Biogen reports earnings before the open on April 25

Deputy Editor
Apr 17, 2023 at 10:14 AM
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Biogen Inc (NASDAQ:BIIB) is buzzing today, after Piper Sandler and Wedbush praised the drugmaker ahead of the company's first-quarter earnings report -- due out before the market's open on Tuesday, April 25. The former upgraded BIIB to "overweight" from "neutral" while hiking its price target to $346, while the latter raised its price objective to $263.

Piper Sandler is optimistic about Biogen's Alzheimer's drug Leqembi, noting that the drug's uptake could "almost quadruple within six months." Wedbush, meanwhile, anticipates a "slight" beat for the biotech concern's top- and bottom-lines.

Biogen stock was last seen up 1.4% to trade at $292.15, and opened trading as high as $293.50. The shares are fresh off their fifth-straight weekly win, and are on track for their highest close since Feb. 3. 

BIIB has closed higher the day after earnings in seven of the last eight quarters, averaging a 2.3% move the day after earnings over the last two years, regardless of direction. This time around, the options market is pricing in a larger-than-usual post-earnings move of 4.5%.

Even with earnings looming, options are attractively priced right now. This is per the stock's Schaeffer's Volatility Index (SVI) of 31% that ranks in the extremely low 12th percentile of its annual range. It's also worth pointing out that the equity ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of 2 out of 100. In other words, BIIB has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

 

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