Market Overview

Piper Jaffray Says Quidel Shares Can Continue To Rise On The Back Of New Deal With Alere

Share:
Piper Jaffray Says Quidel Shares Can Continue To Rise On The Back Of New Deal With Alere
Related QDEL
The Week Ahead: Switch's Lockup Expires, Spotify Debuts, And More
Near-Term Catalysts, Long-Term Opportunities Make Quidel A Strong Buy, Says Raymond James
Related ALR
Abbott Labs Has 'An Emerging Picture Of Top-Tier Growth,' Says Morgan Stanley
Wall Street's M&A Chatter From Sept. 26-Oct. 1: Nordstrom, US Concrete, Ecolab And More

Analysts at Piper Jaffray turned bullish on Quidel Corporation (NASDAQ: QDEL), mostly due to the company's "sweetening" of its already attractive Alere Inc (NYSE: ALR) asset acquisition. The firm's William R. Quirk upgrades Quidel's stock rating from Neutral to Overweight with a price target boosted from $35 to $50.

Quidel, a diagnostics maker, announced in July it would buy Alere's triage assets but on Monday announced it has revised the agreement to now include the full worldwide BNP business, Quirk highlighted. While the revised deal implies an additional $48 million in BNP revenue, more importantly, the deal will add $50 million to $60 million in EBITDA. In fact, the entire deal could now boost Quidel's annual EBITDA by around $100 million.

The analyst's 2018 earnings per share estimate were also moved higher by 64 percent to $1.34 per share and then rise another 41 percent in fiscal 2019.

"Whether it is luck or being at the right place at the right time, we believe Quidel has done it again and sweetened its already attractive Alere deal," the analyst emphasized.

Looking forward, Quidel's stock is expected to move higher as investors begin to digest the revised deal and accretion estimates, the analyst added. As such, a new multiple of 4x 2018 EV/pro forma revenue is appropriate as opposed to a prior 3x multiple which derives the analyst's new $50 price target.

At last check, shares of Quidel were up 8.12 percent at $44.23.

Related Links:

Mid-Morning Market Update: Markets Edge Higher; AutoZone Earnings Top Expectations

Benzinga's Top Upgrades, Downgrades For September 19, 2017

Latest Ratings for QDEL

DateFirmActionFromTo
Apr 2018BarclaysMaintainsOverweightOverweight
Mar 2018Craig-HallumInitiates Coverage OnBuy
Mar 2018Raymond JamesUpgradesOutperformStrong Buy

View More Analyst Ratings for QDEL
View the Latest Analyst Ratings

Posted-In: Analyst Color Biotech Long Ideas News Upgrades Health Care Price Target Asset Sales Best of Benzinga

 

Related Articles (QDEL + ALR)

View Comments and Join the Discussion!