UPDATE: Canaccord Genuity Downgrades St. Jude Medical to Sell, Reiterates $35 PT on Multiple Concerns

In a report published Tuesday, Canaccord Genuity analyst Jason R. Mills downgraded the rating on St. Jude Medical STJ from Hold to Sell, but reiterated the $35.00 price target.

In the report, Canaccord Genuity noted, “We downgrade STJ to SELL from Hold, owing primarily to: 1) questionable earnings quality, 2) our bearish view of the product pipeline relative to competitors in key growth markets (e.g., TAVI, renal denervation), 3) potential for continued share loss in its largest business (i.e., CRM), and 4) overextended valuation based on the key metric in our mid/large-cap valuation methodology (i.e. P/E/Growth). We maintain our $35 price target (1.4x PEG X 2014E ‘pro forma' EPS of $3.93), representing over 20% potential downside from current levels.”

St. Jude Medical closed on Friday at $45.15.