The SPDR S&P Biotech ETF (XBI) has surged 49 percent in 2017 to its highest level in more than two years, but some say the move isn’t over just yet.
Erin Gibbs, a portfolio manager with S&P Global, points out that “the average stock in the XBI is trading at 21 percent below its [average] analyst target price. The average stock is rated a buy.”
Meanwhile, biotech valuations “are just starting to recover,” she wrote to CNBC on Friday, while the forward price-earnings ratio for the S&P 500 as a whole “has remained at the top of a 3 year range.”
