Guggenheim says to buy the stock's dip
Global Blood Therapeutics Inc (NASDAQ:GBT) stock is down 10.1% to trade at $51.70, after the California-based biopharmaceutical firm presented data for its sickle cell disease (SCD) treatment. While voxelotor met its main goal in a late-stage study, some are questioning its ability to create benefits for patients. Amid today's big move, GBT options traders are active, with volume running at seven times the expected intraday pace.
With about 90 minutes left in today's trading, 12,000 calls and 4,500 puts have changed hands, with volume pacing in the 99th annual percentile. The June 50 put and 60 call are most active, with more than 7,300 contracts collectively on the tape. The bulk of the action at each front-month strike has gone off at the ask price, though it's not clear if positions are being opened or closed here.
Widening the scope, it's been put buyers who have been busier than usual in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GBT's 10-day put/call volume ratio of 0.49 ranks in the 84th annual percentile. So, while calls have outpaced puts on an absolute basis, the rate of put buying relative to call buying has been accelerated.
Analysts, meanwhile, are overwhelmingly bullish on GBT, with 13 of 14 in coverage maintaining a "strong buy" rating. Plus, Guggenheim earlier said, "we would be buyers on any weakness," while Cantor Fitzgerald raised its price target to $110 from $96, well above the average 12-month price target of $92.31.
Looking closer at the charts, GBT stock has rallied hard off its late-November test of the $30 mark, topping out at a May 30 15-month peak at $63. Today's drop has the shares on track to close below their 80-day and 120-day moving averages for the first time since late December.
