Is This Analyst Wrong About Halozyme?
Every once in a while, there is an event that makes investors scratch their heads. While most investors don’t base their investing decisions solely off sell-side upgrades/downgrades, it is still interesting to read them in order to perhaps gain some additional insight. Unfortunately, there are occasions when some of these research reports are published without much substance behind them. Such an occasion, according to me, occurred earlier this morning when Jefferies increased its price target on Halozyme (NASDAQ:HALO) to $4.50.
Based on the history of research that Jefferies has issued on Halozyme, it would appear that the research firm has a bone to pick with the company. However, the research firm has consistently been wrong with regard to its price predictions on Halozyme.
Back in August 2012, Jefferies reduced its rating on Halozyme from Hold to Underperform and cut its price target from $8 to $3. Before the downgrade occurred, share of Halozyme were trading at $8.56. After the downgrade, the value of the company was cut in half. The report cited FDA concerns regarding the company’s rHuPH20 trials for HyQ and Cinryze. The report also cited unlikely additional partnership opportunity, conceivable termination of Baxter (NYSE:BAX)/ViroPharma deals and skepticism regarding the SC Herceptin/SC MabThera getting EU approval.