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UPDATE: BMO Capital Markets Lowers PT on Covidien Ahead of Mallinckrodt Spin-Off

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In a report published Friday, BMO Capital Markets analyst Joanne K. Wuensch reiterated an Outperform rating on Covidien (NYSE: COV), but lowered the price target from $72.00 to $64.00.

In the report, BMO Capital Markets noted, “Covidien management has provided a tremendous amount of detail to aid investors with their evaluations of ‘RemainCo' and Mallinckrodt as standalone businesses, and we believe the transaction is well understood. Now the focus will shift to execution, against FY2Q13 results which raised some questions, and FY2013 guidance, which we view as reasonable, if not somewhat conservative. This said, our investment thesis on COV remains: the company's diversified portfolio and global footprint should allow it to manage through changes in healthcare, drive operating margin expansion, and deliver revenue above the market growth rate, looking for mid-single-digits that could be leveraged to high-single-digits/low-double-digits over time.”

Covidien closed on Thursday at $63.09.

Posted-In: BMO Capital Markets Joanne K. WuenschAnalyst Color Price Target Analyst Ratings


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