UPDATE: ISI Group Reiterates Neutral Rating, Raises PT on Covance

In a report published Monday, ISI Group reiterated its Neutral rating on Covance

, and raised its price target from $60.50 to $69.50. ISI Group noted, “Covance posted solid 4Q results, with continued strong momentum in Late Stage countering ongoing softness from Early Stage. Management initiated FY13 EPS guidance of $2.85-$3.15 (in-line with investor expectations) with the high end of the range representing continued outperformance in Late Stage and a return to modest growth in Early Stage and the low end of the range representing a meaningful decline in Early Stage or an increase in large order cancellations in Clinical Development / Central Lab. In 1Q?13, CVD expects solid performance from CD / CL to be tempered by seasonal softness in Toxicology and the impact of ongoing IT investments. These factors, in concert with a sequential slowdown in Discovery Services during 1H should drive slower growth in 1Q, while IT initiatives should benefit y-o-y comps in 2H. Given improved execution and clearer visibility to an operating margin recovery (inclusive of restructuring), we are raising our PT from $60.50 to $69.50. We are also reiterating our Neutral rating as we would argue that at current levels, shares have already baked in the enthusiasm surrounding EPS trajectory.” Covance closed on Friday at $67.20.