Barclays on Medical Supplies & Devices: Weekly Insights/Observations - June 6, 2011

June 6, 2011 1:19 PM EDT Send to a Friend
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Barclays on Medical Supplies & Devices: Weekly Insights/Observations - June 6, 2011

Barclays analyst says, "Medical Supplies & Devices stocks outperformed the S&P 500 and the NASDAQ. The group was down 2.0% for the week vs. a 2.3 % decrease in the S&P 500 and a 2.3% decrease in the NASDAQ."

"Barclays Capital Medical Supplies & Devices Summer Outlook and 1QEPS Review - Looking for a Better 2H? - Despite a generally weak 1Q, we believe that investors expect modest increases in revenue growth in the 2H, due to improvements in utilization (over easy 2010 comps) and some excitement around new products. On the other hand, medical supplies and devices stocks have had a 'good run' YTD as the Barclays Capital Medtech Index (up ~9%) has outperformed the S&P 500 (up ~3%). Thus, we note that valuations are less attractive than they were coming into the year. Going forward, we believe expectations for volume increases will be partially offset by continuing macro headwinds, including increased pricing pressure across the sector."

"Meetings with CareFusion (NYSE: CFN) Management - In a nutshell, we came away from the meetings more positive on the company's opportunities for margin expansion in the near term and revenue growth in the medium term. Despite our positive bias on the company, we are keeping our Equalweight/Neutral rating on the stock based on valuation and our view that much of the good news around pumps, execution, and margin expansion is baked in to the current multiple."

"SEC Filing Monitor. We highlight an 8-K filing from Stryker (NYSE: SYK) and note insider transactions at CR Bard (NYSE: BCR), Edward Lifesciences (NYSE: EW), and Heartware (Nasdaq: HTWR)."

Other stocks of Note: Medtronic (NYSE: MDT)


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