William Blair & Company Maintains Meridian Bioscience (VIVO) Market Perform Rating
March 18, 2010 10:43 AM
William Blair & Company analyst Brian Weinstein maintained his Market Perform rating for shares of Meridian Bioscience Inc. (Nasdaq: VIVO).
Although Meridian Bioscience Inc. lowered its sales and earnings guidance significantly, the main reason behind the move was an industry wide issue.
The company built up a large inventory of flu test kits during the H1N1 flu scare but when the flu levels didn't reach the levels previously feared, the flu test kit sales suffered.
The William Blair & Company analyst wrote, "based on our new 2010 calendar EPS estimate of $0.72, the stock trades at a P/E ratio of 28 times and an EV/EBITDA of more than 15 times. These are both meaningful premiums to the other diagnostic companies in Meridian’s comp group, which have mean valuations of 22 times and 10 times, respectively. While we believe that the company deserves some premium valuation to its comp group due to its solid balance sheet, the potential for upside to estimates once illumigene is approved, and rock solid dividend, at current levels it is difficult to say the name is inexpensive. That said, the dividend, which is yielding approximately 4% should help support the stock; and as a result, we do not see significant downside from current levels unless the illumigene trials miss the mark."
