Reluctant takeover target Genentech (DNA: sentiment, chart, options) was slapped with a downgrade from Citigroup this morning, with the brokerage firm expressing its doubts about the stock's valuation. Earlier this week, DNA turned down an $89-per-share acquisition offer from majority shareholder Roche, and the shares have since spiked as the market anticipates a higher bid. Even so, says Citi, it's probably not worth chasing the stock at its current levels.

To clarify, even the skeptical brokerage firm anticipates an increased offer from Roche; the broker raised its price target on DNA from $91 to $108 to account for an upwardly revised bid. It's just that the analyst doesn't feel this possible premium is high enough to warrant an investment in the shares, as they hover narrowly below the $100 level.

The market has more or less taken the news with a grain of salt, as DNA is just fractionally lower at last check. Meanwhile, option traders seem to have already decided to hedge their bets where the takeover target is concerned. Yesterday on the International Securities Exchange, traders bought to open 11,176 puts on DNA, compared to just 3,115 calls.