UPDATE: Piper Jaffray Downgrades Hologic to Neutral, Lowers PT Following STD Channel Checks

In a report published Wednesday, Piper Jaffray analyst William R. Quirk downgraded the rating on Hologic HOLX from Overweight to Neutral, and lowered the price target from $27.00 to $21.00. In the report, Piper Jaffray noted, “Our STD channel checks suggest stable/improving market growth, with sequential domestic CT/NG volume increasing 1.3%, ~in-line with our modeled 1.4% estimate. We view Roche's HPV account wins as a potential risk to Gen-Probe's CT/NG share, with multiple Roche HPV accounts evaluating consolidating STD volume (i.e., CT/NG & HPV on one instrument). We are adjusting our forward estimates upward slightly for Hologic's STD win at DGX ($48.9M/$0.04 increase to F2014), although we do not believe there are additional large pipeline deals and view this news as already priced into shares. We believe Roche account wins represent an increased risk to Gen-Probe's CT/NG franchise and anticipate HOLX's legacy 2D mammography to remain a drag on Breast Health, likely limiting near-term upside. For these reasons, we are downgrading HOLX shares to Neutral with a $21 price target (was $27), with our lowered multiple (~11x CY2014E, was ~15x) reflecting these concerns.” Hologic closed on Tuesday at $19.70.