UPDATE: Bank of America Maintains St Jude Medical at Buy with $43 PO on Durata Outlook

Bank of America reiterated its Buy rating and $43 price objective on St Jude Medical STJ as it updated its stance on shares based on Durata. Bank of America said, "The cumulative impact of pipeline disappointments, communication missteps and FDA's intense regulatory scrutiny of Durata over the last six months has sent STJ into a steep decline with the stock off nearly 30% since its recent highs in the low $40s. The latest issue to hit the stock was the release Tuesday night of a less redacted version of a recent FDA 483, which suggested at least some incremental risk to Durata. At the current price of $31.37, we believe the market now discounts roughly a 50% probability of Durata being recalled. Our sensitivity analysis suggests downside to $24 if Durata is recalled and upside to $40 if no problems surface. We think the probability of a recall is well below 50% given our read of the 483." St Jude Medical closed at $31.37 on Wednesday.