Emergent BioSolutions Inc

Emergent BioSolutions, Inc. (NYSE: EBS) is a life sciences company providing preparedness and response solutions addressing accidental, deliberate and naturally occurring public health threats (PHTs). Its segments include Products Segment and Services Segment.

Recent Business and Financial Updates:

• EBS reported total revenues of USD 165 million for Q1 2023, surpassing the previous guidance range. The company incurred a net loss of USD 183 million and recorded negative adjusted EBITDA of USD 101 million.
• The company also updated its guidance for FY 2023 and provided initial guidance for Q2 2023.
• EBS received Notices of Intent to Procure medical countermeasures, including ACAM2000® (Smallpox Vaccine), VIGIV (Vaccinia Immune Globulin Intravenous), and BAT® (Botulism Antitoxin Heptavalent), from the U.S. government for the Strategic National Stockpile, addressing the threats of smallpox and botulism.
• The U.S. Food and Drug Administration (FDA) granted approval for NARCAN® Nasal Spray 4 mg as an over-the-counter emergency treatment for opioid overdose.
• Additionally, EBS announced an agreement to sell its travel health business to Bavarian Nordic for a total of up to USD 380 million, including an upfront payment of USD 270 million.
• In terms of financial performance, Q1 2023 saw a decrease in both Product gross margin and Product adjusted gross margin by USD 116.3 million and USD 113.3 million, respectively, compared to Q1 2022. Similarly, Services gross margin and Services adjusted gross margin decreased by USD 22.2 million each in Q1 2023 compared to Q1 2022.

Technical Observation (on the daily chart)

With a past year return of correction of almost 71.49%, the price has been in a persistent downward trend over the last year, with the medium-term also negative trend evident by a correction of 16.10% in previous three months. The price has taken a decent support from levels of USD 7.00 – USD 7.60 in March 2023, with the current price expected to form a double bottom with a movement towards upside from the support levels. Also, the momentum indicator RSI (14 period) displays value of 42.62, indicating some consolidation or a short-term upward movement. Price is also below to the 21-day SMA and 50-day SMA trend-following indicators, which can serve as dynamic short-term resistances.

As per the above-mentioned price action, recent business and financial updates, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Emergent BioSolutions at the current price of USD 8.10 as of June 15, 2023, at 10:30 am PDT.

 Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 15, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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