UPDATE: Bank of America Downgrades Mindray Medical International Ltd. to Neutral, Lowers PT Following Disappointing 1Q13 Results

In a report published Wednesday, Bank of America analyst Serena Shao downgraded the rating on Mindray Medical International Ltd.

from Buy to Neutral, and lowered the price target from $39.50 to $38.00. In the report, Shao noted, “Mindray reported a disappointing 1Q13 Result with Sales/ Earnings (non GAAP adjusted) missing consensus by -6%/ -10% respectively. The weak performance is mainly due to emerging market sales being disrupted by currency fluctuations and tougher import policies as well as political instability; with revenue growth in these industries flat during 1Q. As these regions accounted for ~30% of total sales and have enjoyed more than 20%+ growth in the past (historical data in Table 2), we believe this is a significant and fundamental change for Mindray's business stemming from the risk of greater growth reliance coming from these markets. As a result, we revised down FY13E Sales/Earnings by -1%/-3% respectively to reflect our lack of confidence in international sales growth, and downgrade our rating to Neutral on the back of greater downside risks and lack of positive catalysts in the near term.” Mindray Medical International Ltd. closed on Tuesday at $37.42.