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Investing.com - UBS maintained its Buy rating and $106.00 price target on DexCom (NASDAQ:DXCM) following a Friday sell-off triggered by concerns about the company’s G7 continuous glucose monitoring (CGM) sensor. The stock has fallen over 10% in the past week, with InvestingPro data showing the relative strength index (RSI) suggests oversold conditions.
The market reaction stemmed from reports of increased MAUDE events and injuries related to the G7 sensor in recent months, which intensified bearish sentiment that G7 might be less reliable than previous versions and Abbott’s Libre system.
UBS analyst Danielle Antalffy defended the stock, stating that physician checks, management conversations, and recent surveys do not indicate any perception among clinicians or patients of meaningful differences in reliability or quality between DexCom and Abbott products.
The firm’s research contradicts the market’s negative reaction to the MAUDE reports, which are submissions to the FDA’s Manufacturer and User Facility Device Experience database that tracks adverse events.
UBS remains confident in the broader adoption trajectory for CGM technology, noting they "continue to believe we are in a rapid ramp to CGM becoming standard of care across all diabetics."
In other recent news, DexCom has faced significant scrutiny following a short report by Hunterbrook Media, which raised alarms about the safety of the company’s G7 continuous glucose monitoring device. The report alleged that inaccuracies in the device’s readings have led to hospitalizations and deaths, claiming an unauthorized design change was made to a critical component. In response to these concerns, Oppenheimer downgraded DexCom’s stock rating from Outperform to Perform, highlighting challenges related to the G7 device’s accuracy and performance. Meanwhile, Piper Sandler maintained an Overweight rating on DexCom, acknowledging potential headwinds but expressing confidence in the company’s market position. They pointed to potential impacts from ketone sensing technology by Abbott Laboratories and a proposed competitive bidding rule by the Centers for Medicare & Medicaid Services. Argus Research also expressed optimism by initiating coverage with a Buy rating, citing DexCom’s strong position in diabetes monitoring. These developments reflect a mix of caution and confidence from analysts regarding DexCom’s current standing in the market.
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