What happened
Commercial-stage biotech CTI BioPharma (CTIC) wasn't looking overly healthy on Wednesday. Following an analyst's price target cut, investors sold out of the company, leaving the stock with a more than 9% decline on the day. That was far steeper than the 0.3% dip of the S&P 500 index.
So what
That slice came from a prognosticator who's been largely bullish on CTI, Stifel's Benjamin Burnett. On Wednesday before market open, he trimmed his price target to $8.70 per share from the previous $9. Given that the change isn't that drastic, he's maintaining his buy recommendation on the shares.
Burnett's reasoning behind the move wasn't immediately apparent. It's a bit unexpected, given that he actually raised his level in the recent past -- at the end of September, he made a more dramatic adjustment by raising it to the aforementioned $9 from his preceding $7.90.
In contrast to many other biotechs, CTI stock has done fairly well this year -- in fact, it has nearly doubled since the beginning of this year. This was due largely to the Food and Drug Administration's approval in March of the company's Vonjo, a drug that treats a rare bone marrow illness called myelofibrosis.
Now what
Nevertheless, biotech stocks can often be sensitive to even fairly minor changes and adjustments. This seems to be the dynamic behind CTI's Wednesday fall. The future still looks rather bright for the company, particularly with Vonjo on the market, so investors shouldn't get discouraged by this latest analyst adjustment.
