Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotech InterMune (NAS: ITMN) plummeted 16% in intraday trading Thursday after a Wall Street analyst at Jefferies reiterated its underperform rating.
So what: Jefferies also lowered its target on the stock from $24 per share to $18, representing about 40% worth of downside from yesterday's close. The firm cited potential financing risks and unreasonably high market expectations as the reasons for the cut, triggering fears that it could be the next Dendreon-like (NAS: DNDN) disaster.
Now what: I wouldn't be so quick to pounce on this plunge. Even with the recent sell-off, InterMune shares are still up more than 150% over the past year and 45% above Jefferies' price target, suggesting that there's still plenty of room to fall. Jefferies may be overly bearish, but given today's horrific 67% plunge in Dendreon, I'm just not willing to take any chances.
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At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyalways gets a perfect score.
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