BTIG Says Nothing New with Alere's (ALR) Q116 Filing; 'Buy' Thesis Remains Intact
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BTIG affirms Alere (NYSE: ALR) with a Buy rating and $48 price target after the company announced full Q116 results earlier.
Analyst Dane Leone commented that the filing offered nothing really new.
Revenues of $578m declined organically -1%, which was below our ~$582m estimate. Importantly, key product lines performed well and commentary from the CEO implied that organic growth should continue to improve during 2Q through YE2016, with commentary suggesting positive organic growth in 2Q16, the analyst said.
Other points noted by Leone:
- Alere I continues to ramp as a key growth driver of Infectious Disease: Alere I revenues of $12m during 1Q16 were +$8m above the $4m in sales reported during 1Q15. The Infectious Disease business likely grew +3% organically YoY, despite a significantly weaker flu season (core flu products likely declined -$8m YoY).
- Toxicology Core Sales Expected to Rebound: Core Tox grew ~0.3% YoY, which is relatively weak compared to the normal ~4 – 5% growth run rate, but a +6.5% YoY comp during 1Q15 created a negative optical effect. We expect core growth for the Toxicology segment to rebound over the remainder of the year.
- Cardiometabolic weakness in-line with the INRatio Recall: We estimate that Cardiometabolic declined -0.7% YoY during 1Q16, which is unsurprising given the announced global recall of INRatio.
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