BLUD’s Gross Margin Expansion To Be Modest In FY2011

Analysts at Jefferies & Co reiterate their "hold" rating on Immucor

. The target price for BLUD is set to $21. BLUD announced its sales guidance for FY2011 slightly below and EPS forecasts in line with the estimates. “We expect the GM in FY11 to expand at a moderate pace given the price contributions from reagent revenues and a decrease in Quality Systems Improvement Project (QSIP) related costs, slightly offset by higher instrument sales given the release of Galileo NEO…. BLUD launched the Galileo NEO, the newest automated instrument for high volume customers, in the EU in F3Q10 and received FDA clearance in April 2010 (F4Q10). On the call we will look for management's comments on the initial reception of NEO in the US,” the analysts mention. Jefferies adds, “While we are attracted to Immucor's classic IVD business model and its leading instrumentation for automated blood grouping and typing (

) work flows, the specter of possible antitrust action and FDA manufacturing concerns strikes us as probably too much of an overhang at present for the stock to overcome.”