UPDATE: Piper Jaffray Initiates Patterson Companies at Overweight, with $37 PT on Improving Market Trends

Piper Jaffray initiates its coverage on Patterson Companies

with a rating of Overweight and a price target of $37. Piper Jaffray says, "Patterson is a leading supplier of equipment and consumable products to the dental, veterinarian, and rehabilitation markets. Our positive outlook is based on 1) PDCO's exposure to an improving dental market, which should lead to margin expansion, and 2) returning capital to shareholders through a dividend and share repurchase. While there is a slight overhang due to an exclusive vet contract that could change in 2013, improving industry trends should help mitigate the impact if IDXX selects PDCO. Our $37 PT is derived using a P/E multiple of 16.5x our CY13 EPS estimate of $2.27." PDCO closed at $33.65 on Thursday.