UPDATE: JP Morgan Reduces PT to $17 on Luminex; Gentura Acquisition Detracts From Core Focus
JP Morgan reiterated its Underweight rating on Luminex (NASDAQ: LMNX) and reduced its price target from $18 to $17.
JP Morgan noted, "Luminex announced the acquisition of privately-held GenturaDx for $50M, a company developing an RT-PCR platform, which should be available in early 2014 with a variety of assays, albeit ones that will be launched into an increasingly crowded molecular diagnostics market. The dilutive acquisition is expected to add $6M to 2012 operating expenses (excluding acquisition related expenses which should affect Q2), with further dilution potential in 2013 and even 2014, in our view. Given the move towards PCR-based platforms (with questionable ROIC) away from the company's core multiplexing technology (similar to the Eragen acquisition last year), we continue to question the long-term growth prospects and valuation for the company's core technology, particularly within clinical markets."
Luminex closed at $24.35 on Friday.
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