UPDATE: J.P. Morgan Raises PT on WuXi PharmaTech on Strong 4Q12 Results

In a report published Monday, J.P. Morgan reiterated its Overweight rating on WuXi PharmaTech

, and raised its price target from $18.00 to $20.00. J.P. Morgan noted, “Despite a 25% appreciation over the last year (+13% YTD), we see further room for the stock, with several trends favoring margins, offsetting the known headwinds of wage inflation and FX: (1) improved toxicology utilization (50-60% going to 80-90%); (2) improved biologic sales and profitability (from 2% headwind to margins today to profitable within two years); (3) China-Lab growth faster than manufacturing and Apptec, offering favorable mix; (4) transition of work to low-cost geographies in China proceeding on track (e.g.Wuhan); (5) Lean Sigma programs gaining traction; and (6) more commoditized Synthetic Chemistry offering become a smaller part of the business (~18% vs. 22% one year ago).” WuXi PharmaTech closed on Friday at $17.75.