Canaccord Reiterates On Alere, Boosts Price Target To $60

In a report published Tuesday, Canaccord Genuity analyst Mark Massaro reiterated a Buy rating on Alere Inc ALR with a price target raised to $60 from a previous $56 following a meeting with management that left the analyst with a "greater sense of appreciation" for the company.

"While the stock has had a strong run (plus 35 percent year to date in 2015), we continue to recommend investors accumulate shares of Alere given our expectations for multiple expansion as management executives on its core initiatives of divesting non-core assets, paying down debt, improving operations, stabilizing weaker businesses, and driving new product revenue," Massaro wrote.

According to Massaro, an investment in Alere is also an investment in "world-class people." The analyst added that his principal takeaway from the meeting is the company remains commitment towards quality, beginning with its people. As an example, Jim Hinrichs (Executive Vice President and Chief Financial Officer) is "energized" and focused on restoring growth to the company. In addition, the company has made a large number of "important" hires over the past year to attract "the best possible people" to manage the various divisions.

Massaro also pointed out that management stated it has "plenty of access" within the retail clinical opportunity, including CVS Health Corp CVS's MinuteClinics, which stands in contrast to other diagnostics companies that have "lamented" CVS's "sheer size" and slower tendency to choose platforms and make decisions. As such, the analyst "wouldn't be surprised" to see CVS at some point choose the Alere i to be sold into its approximate 1,000 MinuteClinics across the U.S.

Massaro continued that Alaro's management described Alere i as a "crown jewel" and has big plans to ramp growth in the business. In addition, the company remains active in discussions to divest several non-core assets across its portfolio. The company has a reputation of generating "meaningful returns" for assets that could be difficult to sell, and this time around should prove to be no different.