Would You Still Hold Biogen Stock If It Fell Another 30%?
Biogen (BIIB) stock is down 12.4% in 5 trading days. The recent slide reflects renewed concerns around revenue and EPS declines, Q4 charges, and a weak pipeline, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Biogen stands today.
- Size: Biogen is a $24 Bil company with $10 Bil in revenue currently trading at $164.42.
- Fundamentals: Last 12 month revenue growth of 4.8% and operating margin of 24.8%.
- Liquidity: Has Debt to Equity ratio of 0.27 and Cash to Assets ratio of 0.14
- Valuation: Biogen stock is currently trading at P/E multiple of 15.0 and P/EBIT multiple of 11.1
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 22.9% within a year. See BIIB Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced. For details, see Buy or Sell BIIB Stock
That brings us to the key consideration for investors worried about this fall: how resilient is BIIB stock if markets turn south? This is where our downturn resilience framework comes in. Suppose BIIB stock falls another 20-30% to $115 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- BIIB stock fell 54.8% from a high of $414.71 on 10 June 2021 to $187.54 on 9 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $318.06 on 7 May 2023 , and currently trades at $164.42
| BIIB | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -54.8% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- BIIB stock fell 33.6% from a high of $355.63 on 4 November 2020 to $236.26 on 9 November 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 June 2021
| BIIB | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -33.6% | -33.9% |
| Time to Full Recovery | 210 days | 148 days |
2018 Correction
- BIIB stock fell 43.5% from a high of $383.83 on 25 July 2018 to $216.71 on 22 March 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 June 2021
| BIIB | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -43.5% | -19.8% |
| Time to Full Recovery | 808 days | 120 days |
2008 Global Financial Crisis
- BIIB stock fell 52.7% from a high of $82.51 on 15 October 2007 to $39.02 on 1 December 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 April 2011
| BIIB | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -52.7% | -56.8% |
| Time to Full Recovery | 865 days | 1,480 days |
Feeling jittery about BIIB stock? Consider portfolio approach.
Why Stock Pickers Win More With Multi Asset Portfolios
Individual stocks can soar or tank but multi asset exposure steadies the ride. A spread out portfolio captures upside while limiting the damage from any one market.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices