Believe In The Haemonetics Turnaround Story; JMP Upgrades To Market Outperform

Shares of Haemonetics Corporation HAE, a provider of products to customers involved in the processing, handling and analysis of blood, gained more than 4 percent Thursday morning after analysts at JMP Securities turned bullish on the stock.

David Turkaly upgraded Haemonetics' stock from Market Perform to Market Outperform with a newly established $50 price target due to increased confidence in the company's turnaround story.

Haemonetics is now led by a "thoroughly overhauled" management team that communicated to the Street a compelling three-phase strategy which is seeing early signs of success, Turkaly stated. The first phase of the plan includes stabilizing the business and was mostly accomplished in the first half of 2017. The second phase of the strategy calls for a transformation of the business and is expected to be mostly completed by the end of fiscal 2018.

Beyond fiscal 2018, the company said it wants to achieve a sales level of $1.1 billion to $1.2 billion by fiscal 2021 and boost margins by 13 percent in fiscal 2017 to around 20 percent in 2021, the analyst added.

The company's three-phase strategy and longer-term objectives implies "very significant" earnings per share growth over time. As such, the stock also has room to move much higher as well. However, the analyst doubts there is room for any room for substantial upside to the stock in the immediate term but it's still prudent to "move now" on the stock than miss the opportunity altogether.

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