These days, Invitae Corporation (NVTA 68.59%) just can't catch a break. On Tuesday, the company was slammed with yet another analyst downgrade, and as a result, its stock ended up falling by more than 13% over the week, data compiled by S&P Global Market Intelligence reveal.
The latest prognosticator to catch a case of the bears with Invitae is Cowen's (COWN) Dan Brennan. He downshifted his recommendation from the former outperform (read: buy) to market perform (hold). Along the way, he took a buzz saw to his price target, substantially reducing it from $8 per share to $2.50.
It's not Invitae's operations Brennan is concerned with. Rather, it's what is happening on the loss-making biotech company's balance sheet.
He wrote that his move was due to
additional insight on the path forward to refinancing the '24 debt maturities. While we expect the $135 million loan and $350 million [convertible] can be refinanced, the timing, uncertainty around the mechanism, costs/dilution and default potential are likely to cap the stock, limiting follow through from the new plan recently presented by the new CEO and existing CFO.
Brennan's new, more gloomy take on Invitae is part of a wider trend. Last Thursday, his peer, Andrew Cooper at Raymond James (RJF -0.21%), made a similar buy-to-hold downgrade based on that CEO change (on July 18, the company replaced CEO Sean George with ex-COO Kenneth Knight) and the company's apparently dimmer prospects.
Of the latest guidance, Cooper wrote that it places 2023 revenue nearly 40% below the average estimate prior to the recent spate of analyst adjustments.