CIBC World downgraded Genentech (DNA ) to sector perform from sector outperform.
Analyst Matt Geller says the downgrade is based on roughly $12 billion appreciation in Genentech's shares since May 19, when the company that its experimental drug Avastin improved the survival of colorectal cancer patients when used with chemotherapy. He believes the recent rally reflects $1.5 billion to $2 billion in peak Avistin sales. Based solely on the current information, he doesn't see any clear upside from here.
Still, Geller regards Genentech highly, but with recent appreciation, and believes there are better short- to intermediate-term opportunities. As of today, he dropped the $53 12-month to 18-month target.