Highlights

  • Royal Bank of Canada downgraded Axsome Therapeutics to Market Perform from Outperform
  • Axsome stock fell 0.1% on a day the NASDAQ-100 dropped 1% overall

Axsome Therapeutics Inc. (NASDAQ: AXSM) experienced a slight drop in its share price this week, following a downgrade by Royal Bank of Canada. The firm adjusted its rating from Outperform to Market Perform, citing a reassessment of valuation metrics and future growth assumptions.

Shares closed at USD101.60 on Tuesday, reflecting a 0.1% decline on the day. While this change appears minimal in isolation, it stands out in the context of the broader NASDAQ-100 Index, which dropped by 1%. This meant Axsome outperformed the index on a relative basis by 0.9%, despite the downgrade.

Daily trading activity reached 995,000 shares, valued at around USD101.1 million, slightly above the average volume of 882,439. This uptick in trading activity may indicate investor reactions to the analyst revision or other positioning around recent performance.

The downgrade arrives after a long run of largely optimistic analyst coverage. Since December 30, Axsome has seen 38 analyst rating changes, with 35 being upgrades. The stock has appreciated 19.8% in that timeframe. Despite the downgrade, the majority of analysts still hold favorable views; 35 of the 38 tracked analysts believe the stock has upside potential.

Axsome’s stock currently trades at a 53% discount to the highest analyst price target, suggesting divergent expectations among analysts regarding future performance. Its market capitalization stands at approximately USD5 billion, with institutional investors owning about 57.2% of shares. The company reported a FY2023 earnings-per-share loss of USD5.27, reflecting continued investments in its biotechnology pipeline.