UPDATE: Bank of America Reiterates on CareFusion Following ASHP Meeting

In a report published Wednesday, Bank of America analyst Bob Hopkins reiterated a Buy rating on CareFusion CFN, and raised the price target from $43.00 to $45.00. In the report, Bank of America noted, “Last week we attended the American Society of Health-System Pharmacists (ASHP) meeting in Orlando, FL to better understand CFN's new ES product. We came away from the meeting very bullish on the prospects for ES and bullish on CFN's ability to hit their EPS targets in the back half of 2014 based on our view of how the launch is going. The Street has been skeptical about CFN's ability to hit numbers in the back half, but as the detailed analysis in this note shows, those concerns seem misplaced. More importantly we think the ES system will help build a solid mote around CFN's dispensing business given the way it so clearly meets the needs of hospital systems and broader IDNs. Given our increased conviction in this launch we are raising our PO to $45, which equates to a little over 16x our 2015 estimate of $2.75 (consensus is $2.61). We are bullish on CFN for several reasons including: 1) increased conviction in the ES launch; 2) our view that consensus EPS for 2015 is too low (the Street doesn't even model CFN's EPS growth guidance); 3) our view that CFN has further operating margin expansion over time; 4) CFN's incentive comp is based on a three year EPS growth CAGR that ends in the current year – fiscal 2014; 5) we think CFN's EPS outlook is rock solid – we have more conviction in CFN's ability to hit our EPS #s than we do with any company we follow; and 6) the stock is no longer a consensus buy.” CareFusion closed on Tuesday at $38.49.