Barclays Reiterates a Buy Rating on Hologic

By Jason Carr

In a report released today, Jack Meehan from Barclays reiterated a Buy rating on Hologic (NASDAQ: HOLX), with a price target of $45. The company’s shares opened today at $38.26.

Meehan wrote:

“We believe FY2017 guidance comes in modestly better than the Street bogey, with organic revenues up 4-5.5% (vs. us at 4% previously) and EPS of $2.12-$2.16 (versus us at $2.10 previously). Management commentary continues to be promising with no major surprises. Breast health trends remain sound and initial Affirm traction is promising, Panther continues to drive the diagnostics franchise forward (utilization up to $190K per instrument), and GYN Surgical continues to star with robust growth from MyoSure. As expected, capital deployment remains an opportunity as the company has now de-levered to 2.8x Net Debt to TTM EBITDA. The company certainly has more flexibility to begin re-deploying free cash flow back to shareholders, with a preference for tuck-in M&A and share repurchase.”

According to TipRanks.com, Meehan is a 1-star analyst with an average return of -6.7% and a 26.3% success rate. Meehan covers the Healthcare sector, focusing on stocks such as Quest Diagnostics Inc., Laboratory Corp., and Genomic Health.

Currently, the analyst consensus on Hologic is Strong Buy and the average price target is $43.67, representing a 14.1% upside.

In a report issued on October 28, UBS also reiterated a Buy rating on the stock with a $45 price target.

Hologic’s market cap is currently $9.8B and has a P/E ratio of 38.45. The company has a book value ratio of 4.7976.

Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of HOLX in relation to earlier this year. Most recently, in July 2016, Nancy Leaming, a Director at HOLX bought 5,029 shares for a total of $72,921.

Hologic, Inc. engages in the development, manufacture and supply diagnostics products, medical imaging systems and surgical products dedicated to serve the healthcare needs of women. The company operates through four business segments: Breast Health, Diagnostics, GYN Surgical and Skeletal Health. The Breast Health segment products include a broad portfolio of breast imaging and related products and accessories, including digital and film-based mammography systems, magnetic resonance imaging, breast coils, computer-aided detection for mammography and MRI, minimally invasive breast biopsy devices, breast biopsy site markers, breast biopsy guidance systems, breast imaging comfort pads, and breast brachytherapy products. It has also developed a new breast imaging platform, Dimensions, which utilizes a new technology, tomosynthesis, to produce three dimensional images, as well as conventional two dimensional full field digital mammography images. The Diagnostics segment products include the ThinPrep system, which is primarily used in cytology applications such as cervical cancer screening, the Rapid Fetal Fibronectin Test, which assists physicians in assessing the risk of pre-term birth, and its molecular diagnostic reagents used for a variety of DNA and RNA analysis applications based on its proprietary Invader chemistry. Its current molecular diagnostic offerings based upon this Invader chemistry include Cervista HPV high risk and Cervista HPV 16/18 products to assist in the diagnosis of human papillomavirus, as well as other products to diagnose cystic fibrosis, cardiovascular risk and other diseases. The GYN Surgical segment products include the NovaSure Endometrial Ablation System and the MyoSure Hysteroscopic Tissue Removal System. The MyoSure system is a tissue removal device that is designed to provide incision-less removal of fibroids and polyps within the uterus. The Skeletal Health segment products include dual-energy X-ray bone densitometry systems, an ultrasound-based osteoporosis assessment product, and Fluoroscan mini C-arm imaging products. The company was founded by S. David Ellenbogen and Jay A. Stein in October, 1985 and is headquartered in Bedford, MA.