What happened
These days, Invitae Corporation (NVTA +0.00%) 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.
So what
The latest prognosticator to catch a case of the bears with Invitae is Cowen's (COWN +0.00%) 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.
OTC: NVTA
Key Data Points
Now what
Brennan's new, more gloomy take on Invitae is part of a wider trend. Last Thursday, his peer, Andrew Cooper at Raymond James (RJF +0.88%), 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.
