UPDATE: Goldman Sachs Announces Neutral Rating on Covidien to Reflect New MNK Spin Off

In a report published on Wednesday, Goldman Sachs analyst David H. Roman suspended its prior rating and price target on Covidien COV and announced a new price target of $64 and a Neutral rating on the "new" Covidien which excludes the Mallinckrodt department.

In the report, Goldman Sachs commented that, "Based on the now standalone Medical Devices/Supplies entity, we are projecting sales and EPS of $10.296bn (+4.5% yoy) and $3.70 (+2.7% yoy) for FY13E, respectively. For FY14E, we are modeling $10.743bn (+4.3%) and $4.01 (+8.3%). As a reminder, Covidien's revenue growth profile will likely be pressured for the next 2-3 quarters given FX headwinds and tough comparisons in key businesses (Vascular). EPS growth should also be depressed through 1HFY14, driven by higher spending (investments in pipeline products and emerging markets), the medical device excise tax, and FX translation headwinds. Starting in 2HFY14, we forecast acceleration in sales and earnings growth, and we see sustainable multi-year top-/bottom-line growth in the 4%-5%/10%-12% range."

Covidien closed Tuesday at $65.94.