UPDATE: Piper Jaffray Reiterates Overweight Rating, Raises PT on Derma Sciences
In a report published Wednesday, Piper Jaffray & Co. reiterated its Overweight rating on Derma Sciences (NASDAQ: DSCI), and raised its price target from $13.00 to $16.00.
Piper Jaffray noted, “Earlier today, Derma Sciences reported 2Q12 net loss per share of ($0.23), narrower than the Street estimate of ($0.26). Operating expenses were higher than we anticipated, primarily due to expenses associated with the expansion of the sales force for the Advanced Wound Care (AWC) segment in the wake of the acquisition of MedEfficiency. That said, year-over-year total sales growth was a strong 11%, and gross margins continued to expand as the sales mix continues to shift to the more profitable AWC business. We believe DSCI, at a market cap of around $120M, barely reflects the potential for DSC127, given that the base business continues to grow and is likely to be cash flow positive in 2013. We reiterate our Overweight rating and are increasing our PT to $16 from $13 primarily due to rolling forward of the discounting period to 2.5 years from 3 years.”
Derma Sciences closed on Tuesday at $9.42.
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