A disappointing quarter combined with a set of analyst price target cuts — and even a recommendation downgrade — made Coherus BioSciences (NASDAQ: CHRS) a stock to avoid this week. As of mid-afternoon Friday, according to data compiled by S&P Global Market Intelligence, the healthcare company’s share price had fallen by a steep 56% week to date.
On Monday after market close, Coherus unveiled a set of third-quarter results that, despite a double-digit revenue increase, missed analyst estimates. It also cut full-year guidance for critical line items such as product revenue and research and development. Investors weren’t willing to look on the bright side (at that top-line improvement, for one thing), and they aggressively sold out of the stock.
As if that weren’t damaging enough, analysts were quick to get notably more bearish on the company’s prospects.
On Tuesday, H.C. Wainwright’s Jason Kolbert and Truist Securities’ Robyn Karnauskas both reduced their price targets on the biotech stock. Kolbert cut his level to $13 per share from the previous $20. He maintained his buy recommendation, however. Karnauskas made a nearly identical move, trimming her price target to $12 per share from $20. She also kept her buy designation intact.
The following day, another analyst went a step further by downgrading his recommendation on Coherus. Jason McCarthy of Maxim Group now feels the stock is only a hold, where formerly he had it tagged as a buy.
We should never base our opinion of a stock on the moves of an analyst. Also, it’s easy to be bearish on a company after it reports a weak quarter. Not all aspects of Coherus’s latest quarter were worrying, although there was enough there to warrant concern about its current trajectory. Investors should always balance outside takes on a stock with their personal judgement, and act accordingly.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Truist Financial. The Motley Fool has a disclosure policy.
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