Diagnostic healthcare products manufacturer Quidel Corporation QDEL's shares are not fully reflecting the company's growth potential and likely positive estimate revision bias, according to Raymond James.
Raymond James analyst Nicholas Jansen upgraded shares of Quidel from Outperform to Strong Buy and increased the price target from $55 to $69.
After meetings with Quidel management at the 39th Annual Raymond James Institutional Investors Conference, Jansen said he identified the following as near-term catalysts and long-term opportunities.
- Strong Q1 results: A better-than-thought Q1 flu season and strength in Sofia 2 and Solana placements are likely to help the company achieve revenue growth of 25 percent in Q1 compared to earlier expectations of 10-15 percent growth, the analyst said. Quidel's reference to its adjusted EBITA guidance as the "baseline" in the event of a normal flu season, suggesting likely upside, Jansen said.
- Analyst day scheduled for April: Raymond James expects Quidel will provide a long-term product roadmap and go deeper into its growth drivers at the event, which could serve as a catalyst.
- The underappreciated installed base growth for the Sofia and Solana diagnostic testing platforms is becoming more valuable as the test menu expands
- Raymond James said it has has increasing confidence in the Triage integration and additional revenue and cost synergy opportunities.
- A long-term opportunity exists to cross-sell Quidel's product suite into new global commercial infrastructure, and the company has the potential for additional tuck-in M&A.
The Price Action
Quidel shares are up about 124 percent over the past year.
The stock was surging 4.59 percent to $49.03 at the time of publication Thursday afternoon.
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