UPDATE: Wedbush Initiates Luminex at Neutral, Top Line Growth Expected to Continue
Wedbush analyst Zarak Khurshid published a report on Luminex (NASDAQ: LMNX) that initiated coverage with a Neutral rating and $17.00 price target.
In the report, Wedbush wrote, "We believe LMNX will continue to post top-line growth (up 8% in 2013) with gradually improving EPS leverage, however, based on the increasing competitive risks in the key respiratory diagnostics business and potential headwinds following the heavy 1Q13 flu season, we are cautious about the current multiple. We arrive at our price target through an EV/sales valuation framework under which we assume a 2.9x 2013E EV/sales multiple with $86 MM in net cash and roughly 42 MM shares outstanding. Luminex is trading in line with the diagnostics group on a 2013 EV/sales multiple basis (2.9x vs. 2.9x) and at a premium on a 2013E P/E multiple basis (54x vs. 20x). Versus the life science tools group, Luminex is trading at a premium on a 2013 EV/sales multiple basis (2.9x vs. 2.4x) and on a 2013E P/E multiple basis (54x vs. 19x). Compared to its closest comp, QGEN, Luminex is trading at a discount on a 2013E EV/sales basis (2.9x vs. 3.8x), a premium on 2013E P/E (54x vs. 19x) and in line in terms of FCF yield (4.1%)."
Shares of Luminex closed on Monday at $17.03.
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