2023-06-20 15:55:45 ET
RBC Capital Markets has downgraded Abcam ( NASDAQ: ABCM ) to sector perform, advising investors to take profits from the recent spike in valuation amid takeover speculation.
Abcam shares have been on a roll in recent days, fueled by a board battle with the company's founder, news that activist investor firm Starboard had taken a roughly 2% position, and a disclosure that the company had received "strategic inquiries from multiple parties."
In a note dated June 20, RBC pointed out that the stock has rallied 40% over the last ten days and 65% quarter-to-date. It added that its valuation work "implies relatively little further upside" if a transaction were to take place.
The investment bank said that its "favored" valuation approach leads to a valuation of $20 to $25 per share.
"We have always liked Abcam's fundamentals but see the activist investor engagement and anticipation of a potential bid as likely to drive material volatility in the shares," they added.
The firm lowered it price target on the UK-based company to $22 from $23, due in part to foreign exchange movements.
More on Abcam:
BofA ups Abcam to buy, citing investor activism, improved performance
Abcam jumps after disclosing takeover interest from multiple parties
Activist Starboard Value accumulates stake in British biotech Abcam - report
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RBC Capital downgrades Abcam to sector perform over volatility, valuation