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JMP Securities Upgrades Myriad Genetics, Says 'Revised Guidance Lowers The Bar'

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JMP Securities upgraded Myriad Genetics, Inc. (NASDAQ: MYGN) from Market Perform to Market Outperform and established a $50 price target on Wednesday.

Analyst J.T. Haresco III noted that the company reported Q4 results with revenues of $184.4 million which were in line with consensus of $182.9 million.

The company, however, lowered guidance and and expected total revenues of $730-$740 million for 2015 and adjusted diluted earnings per share of $1.50-$1.55.

In Haresco’s view, “the revised guidance lowers the bar ahead of a number of key anticipated catalysts:”

1. Finishing the transition of the myRisk platform with little disruption in market share.
2. Mark Capone moving into the CEO position in FY 2016.
3. Improving gross and operating margin expansion over a multi-year period.
4. Continued 10-15 percent growth of the hereditary cancer testing market.
5. The potential to kick-start top-line growth through reimbursement catalysts in FY 2016.

Haresco concluded that “a majority of the company's current value is tied to the ramp in predictive medicine revenue” and the “the primary risk to an investment in MYGN shares is related to Myriad's ability to retain and grow revenue from this segment over time.”

With the shares trading near 13x CY16E earnings, Haresco believed "that the current valuation offsets the risks [of] moving forward." The firm’s $50 price target was based on 22x its CY16E EPS of $2.29, in line with the group average of 22x.

Myriad Genetics recently traded at $34.08, down 10.6 percent.

Latest Ratings for MYGN

DateFirmActionFromTo
Jan 2019Cowen & Co.UpgradesMarket PerformOutperform
Jan 2019BarclaysMaintainsUnderweightUnderweight
Jan 2019NeedhamInitiates Coverage OnStrong Buy

View More Analyst Ratings for MYGN
View the Latest Analyst Ratings

Posted-In: J.T. Haresco III JMP SecuritiesAnalyst Color Upgrades Price Target Analyst Ratings

 

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