What Should You Do With Emergent Biosolutions Stock After A 19% Drop In 5 Days?

February 25th, 2021 by Trefis Team
EBS: Emergent Biosolutions logo
EBS
Emergent Biosolutions

The stock price of Emergent Biosolutions (NYSE:EBS), a biopharmaceutical company focused on vaccines and antibody therapeutics for infectious diseases, and opioid overdoses, has seen a 17% drop over the last ten trading days, while it’s down 19% over the last five trading days, and we believe the stock may rebound in the near term. The recent drop can largely be attributed to certain analyst reports downgrading the overall ranking on EBS stock, and profit taking at higher levels of $125 it was trading at last week (before the recent drop), reflecting a 2.5x surge from the levels seen during the March 2020 lows. However, the company recently reported better than estimated quarterly results, and it also re-affirmed its 2021 guidance. The company has signed multiple contracts with pharmaceutical companies, including Johnson & Johnson, Novavax, Vaxart, and AstraZeneca, for developing vaccines under its contract development and manufacturing (CDMO) business. In fact, Emergent has Covid-19 vaccine contract from Johnson & Johnson and AstraZeneca. This has aided the company’s top-line which grew a stellar 41% y-o-y in 2020, and it is estimated to grow another 30% in 2021, and this will likely bode well for EBS stock growth in the near term.

Looking at the recent rally, the 17% drop for EBS stock over the last ten days compares with 0.7% gains seen in the broader S&P 500 index. Now, is EBS stock poised to decline further? It doesn’t look that way. Given the large 19% correction in just five trading days, and based on our machine learning analysis of trends in the stock price over the last few years, we believe that there is a strong chance of a rise in EBS stock over the next month (twenty-one trading days). See our analysis on Emergent Biosolutions Stock Chances of Rise for more details. Curious about the possibility of rising over the next quarter? Check out the EBS Stock AI Dashboard: Chances Of Rise And Fall for a variety of scenarios on how EBS stock could move.

Five Days: EBS -19%, vs. S&P500 0.1%; Underperformed market

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(Extremely rare event)

  • Emergent Biosolutions stock declined 19% over a five-day trading period ending 2/24/2021, compared to a broader market (S&P500) rise of 0.1%
  • A change of -19% or more over five trading days is a 1% likelihood event, which has occurred 12 times out of 1256 in the last five years

Ten Days: EBS -17%, vs. S&P500 0.7%; Underperformed market

(20% likelihood event)

  • Emergent Biosolutions stock declined 17% over the last ten trading days (2 weeks), compared to the broader market (S&P500) rise of 0.7%
  • A change of -17% or more over ten trading days is a 20% likelihood event, which has occurred 248 times out of 1240 in the last five years
While EBS stock may rebound from here, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for UnitedHealth vs Ingevity.

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