Here's Why Tandem Diabetes Care Is Dropping Today

What happened

Shares of Tandem Diabetes Care (NASDAQ: TNDM), a medical device company focused on diabetes, fell about 10% as of 2:15 p.m. EST on Wednesday. The decline is most likely attributable to negative sentiment from Wall Street related to a few of the company's peers.

So what

Here's an overview of some of the news that is impacting diabetes-focused medical device companies today:

  • An analyst at Morgan Stanley lowered their price target on Insulet (NASDAQ: PODD) -- which competes directly with Tandem -- from $105 to $90 in a research report issued on Wednesday. Insulet's stock is down about 8% today in response.
  • Morgan Stanley also lowered its price target on DexCom (NASDAQ: DXCM) -- a diabetes company focused on continuous glucose monitoring that works with Tandem -- to $135 from $150. Dexcom's stock is down about 4% in resopnse.
  • An analyst at Citigroup lowered their rating on Medtronic (NYSE: MDT) -- which makes both insulin pumps and continuous glucose monitors -- to "Neutral" from "Buy," and the price target was lowered to $96 from $109. Shares are falling about 3% in response.
  • A paper was published in the journal Cell Metabolism stating that researchers have found that a new cocktail of drugs can help the body to reactivate insulin-producing cells. While it is still very early, this research could be an important step in curing diabetes.

Add it all up, and it isn't surprising to see that Tandem's stock is getting whacked today, too.

Now what

2018 was a remarkable year for Tandem, so it is possible that its shares are taking a step back today thanks to profit-taking now that investors won't be on the hook for capital gains tax until 2020.

Regardless of the reason for today's drop, I see nothing that suggests the company is any different today than it was at the end of 2018. If you were bullish on Tandem just a few days ago, then there doesn't seem to be a reason to change your tune today.

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool owns shares of Medtronic. The Motley Fool recommends Insulet. The Motley Fool has a disclosure policy.