Biotechnology historically trades at multiples that are elevated relative to broader benchmarks, but after last year’s of struggles for biotechnology names, some analysts see value with some big-name biotech stocks.
IBB, which holds nearly 190 stocks and is a cap-weighted ETF, has a price-to-earnings ratio of just over 21 and a price-to-book ratio of 4.92. The ETF’s three-year standard deviation is just over 25 percent.
“Interestingly enough with biotech, the complex has already dropped to the 38% retracement level and the 50% level is at the 322 level. I think either of these levels would be a good target for the eventual bottom to occur. In fact, we have an array of companies in this sector announcing their earnings over the coming week,” according to Seeking Alpha.
For more information on the biotech sector, visit our biotechnology category.