UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on CareFusion Corporation on FY2Q13 Results

In a report published Friday, BMO Capital Markets reiterated its Outperform rating on CareFusion Corporation CFN, and slightly raised its price target from $34.00 to $35.00. BMO Capital Markets noted, “Expense leverage in the quarter was impressive, with operating margins expanding handsomely to 20.8% from 19.0% y/y and 19.1% q/q, including gross margins that were up 160 bp y/y. This movement is in line with our investment thesis on the stock, which is that while management invests in new products and tuck-in acquisitions (we would have expected more of those by now), it is in a position to drive gross margins and leverage SG&A to expand operating margins, ultimately accelerating top-line growth. Management should be SEC compliant on February 11, 2013, allowing it to reenter the market to repurchase shares.” CareFusion Corporation closed on Thursday at $31.83.