UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on CareFusion Corporation on FY2Q13 Results
In a report published Friday, BMO Capital Markets reiterated its Outperform rating on CareFusion Corporation (NYSE: CFN), and slightly raised its price target from $34.00 to $35.00.
BMO Capital Markets noted, “Expense leverage in the quarter was impressive, with operating margins expanding handsomely to 20.8% from 19.0% y/y and 19.1% q/q, including gross margins that were up 160 bp y/y. This movement is in line with our investment thesis on the stock, which is that while management invests in new products and tuck-in acquisitions (we would have expected more of those by now), it is in a position to drive gross margins and leverage SG&A to expand operating margins, ultimately accelerating top-line growth. Management should be SEC compliant on February 11, 2013, allowing it to reenter the market to repurchase shares.”
CareFusion Corporation closed on Thursday at $31.83.
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