CA - XBI: Biotech Is A Strong Buy As M&A Activity Picks Up (Rating Upgrade)
2024-03-20 04:50:32 ET
Summary
- Shares of biotechnology companies have been lagging behind the S&P 500 Index.
- This underperformance of XBI relative to the S&P 500, however, has only made the opportunity even more attractive to us.
- Evidence of improving fundamentals and rising mergers and acquisitions (M&A) activity within the biotechnology space has been underappreciated by investors.
- Furthermore, valuations on XBI is compelling at just 14.3x forward P/E, versus 25x on the S&P 500 Index.
- We upgrade our rating for XBI from "Buy" to "Strong Buy".
Shares of biotechnology companies have been lagging behind the S&P 500 Index ( SP500 ). Since we initiated our bullish view on the SPDR S&P Biotech ETF ( XBI ) with a "Buy" rating in December 2022 , the S&P 500 Index has surged by a whopping 33.5% while the XBI has only risen by 13.7%....
XBI: Biotech Is A Strong Buy As M&A Activity Picks Up (Rating Upgrade)