UPDATE: Wedbush Securities Downgrades Meridian Bioscience to Underperform, Reiterates $17 PT
In a report published Wednesday, Wedbush Securities downgraded its rating on Meridian Bioscience (NASDAQ: VIVO) from Neutral to Underperform, but reiterated its $17.00 price target.
Wedbush Securities noted, “Given the 24% appreciation in VIVO shares since August and the increasing risk to 2013 numbers we are downgrading to UNDERPERFORM from NEUTRAL. Shares of VIVO now trade at a premium to the group on a 2013E P/E multiple basis (23x vs. 20x group median) and EV/Sales basis (4.2x vs. 3.4x group median). 2013E FCF yield is around 4.8%, above the group median of 4.5%. Our $17 price target is based on a 2013E P/E multiple of 18x and EV/sales of multiple of 3.6x, which represents a 5% premium to the group which gives them greater credit for a relatively safe 3.8% dividend yield. A liberal sum of the parts analysis assuming 4x, 6x, 5x, 2x, 3x EV/Sales for the c.diff, h.pylori, foodborne, life science, and other segments yields a PT of $17.”
Meridian Bioscience closed on Tuesday at $20.56.
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