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Why Emergent BioSolutions Stock Is Sliding Today

By Keith Speights - Feb 19, 2021 at 11:27AM

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An analyst downgraded the stock.

What happened

Shares of Emergent BioSolutions (EBS -3.38%) were sliding 9.3% lower as of 11:13 a.m. EST on Friday. The decline came after Chardan Capital analyst Keay Nakae downgraded the stock from buy to hold. Nakae set a one-year price target for Emergent Biosolutions of $112, more than 4% below the stock's closing price on Thursday.

So what

Chardan Capital's downgrade came after Emergent BioSolutions announced solid fourth-quarter results on Thursday. The company reported record revenue of $583 million, a 62% year-over-year increase. Emergent posted adjusted earnings per share of $3.67 compared to $1.57 in the prior-year period. Both results easily topped the consensus Wall Street estimates.

Vaccine vials

Image source: Getty Images.

Investors shouldn't dwell on what analysts think. Instead, focus on the business prospects for Emergent BioSolutions. And those prospects continue to look quite good.

The company expects to deliver revenue in full-year 2021 of between $1.95 billion and $2.05 billion with adjusted earnings between $475 million and $525 million. The midpoint of the revenue range reflects year-over-year growth of nearly 29%. The midpoint of the adjusted earnings range reflects growth of nearly 18%.

Now what

One potential catalyst for the healthcare stock could be on the way soon. Johnson & Johnson could obtain U.S. Emergency Use Authorization (EUA) for its COVID-19 vaccine by the end of February. Emergent BioSolutions has a contract with J&J to manufacture its vaccine.

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Stocks Mentioned

Emergent BioSolutions Inc. Stock Quote
Emergent BioSolutions Inc.
EBS
$32.60 (-3.38%) $-1.14
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$179.68 (0.03%) $0.06

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