Should You Sell Celgene Stock Following an Analyst Downgrade?

Celgene Corp.'s (NASDAQ: CELG) is arguably one of the globe's most successful biotech companies, yet analysts at investment researcher Morgan Stanley cut their rating on the company from equal weight to underweight on Friday. Analysts' ratings often impact stock prices in the short term -- Celgene's shares were down 5% as of this writing -- but over the long term, investor returns are driven by a company's execution, not by analyst whims and whispers.

Since Celgene has proven it knows a thing or two about successfully developing and commercializing top-selling drugs, you might want to take this downgrade with a grain of salt.

In explaining the downgrade, Morgan Stanley's analyst cited a sooner-than-expected threat to Celgene's top-selling drug, Revlimid. Revlimid is a biologic that's been on the market for more than a decade and is used to treat various hematological cancers, including multiple myeloma. Generally, Wall Street is modeling for generic competition to challenge Revlimid in 2026, but in Morgan Stanley's view, the potential exists for that to happen in 2020.

Source: Fool.com