UPDATE: CRT Capital Initiates Coverage on Covidien plc. at Buy, Announces $82.00 PT
CRT Capital initiated coverage of Covidien (NYSE: COV) with a Buy rating and $82 price target. Shagun Chadha, analyst at CRT, believes the company “has a full pipeline and a road map to tap into five potentially $1+ billion high growth markets each.”
Shares have moved in a straight line higher since the open, now up about 1.4 percent to $71.34.
Chadha said Covidien can “consistently deliver 4-6% revenue growth lead by: a) an improvement in revenue mix towards higher-growth segments and geographies, b) new products introductions, and c) an appetite for strategic acquisitions.”
The analyst credited “solid execution” to the company's superb operational leverage, which, in addition to a non-US tax structure, provides “access to more cash to return to shareholders than its large cap medical technology peers.”
Chadha's projection “calls for 9-13% EPS growth [through 2017] with leverage from its restructuring programs.”
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