Goldman Sachs Raises Price Target on Covidien (COV)

Goldman Sachs is out with a research report this morning, where it reiterates its Neutral rating on Covidien plc

; it has a $49.00 price target on the stock, up from $46.00. The GS analysts have revised their earnings estimates following the company's Q4 earnings to reflect: (1) “Lower CC top-line growth (2) Current FX rates (3) Lower expectations for the Medical Devices and Pharma segments, offset by increased assumptions for Medical Supplies (4) Improved longer-term gross margins.” As for valuation, the analysts remarked, “Despite the +5.2% increase in COV stock today, shares trade at only 11.6X CY2011 EPS, vs. the Medical Supplier peer group at 12.9X. We think the driver of the discount in COV shares relates to concerns over organic growth (around 2% in F4Q) and capital deployment strategies.”