What happened
Shares of Emergent BioSolutions (EBS -5.28%) were sinking 12.8% lower as of 10:53 a.m. ET on Friday. The decline came after J.P. Morgan analyst Jessica Fye downgraded the stock from a neutral rating to an underweight (don't buy) rating. Fye also slashed the 12-month price target for Emergent BioSolutions from $23 to $9.
So what
Wall Street analysts aren't always right. There's even considerable disagreement among analysts about the prospects for Emergent BioSolutions. Five of the six analysts surveyed by Refinitiv in March rate the healthcare stock as a buy or strong buy.
Emergent BioSolutions certainly faces some challenges, though, that could justify investors' caution. The company's total revenue in 2022 plunged 37%. Emergent swung from a profit in 2021 of $230.9 million to a loss of $223.8 million last year.
This year probably won't be a great one, either. Emergent projects full-year 2023 revenue of between $1.1 billion and $1.2 billion. This midpoint of the range reflects a year-over-year increase of 2.7%. The company also expects another net loss this year of between $180 million and $130 million.
Now what
Investors have a couple of important things to look forward to with Emergent BioSolutions. In February, a U.S. Food and Drug Administration (FDA) advisory committee voted unanimously in favor of allowing Emergent's opioid overdose reversal nasal spray Narcan to be available over the counter. The FDA should announce its approval decision by March 29, 2023. Also, Emergent's sale of its travel health business to Bavarian Nordic is expected to close in the second quarter of this year.
