Brean Capital Raises Price Target on NuVasive (NUVA) to $70 Following Solid 2Q

Brean Capital reiterated a Buy rating on NuVasive (NASDAQ: NUVA), and raised the price target to $70.00 (from $60.00), following the company's 2Q earnings report.

Analyst Jason Wittes commented, "NUVA reported a 16.4% (16.1% cc) revenue increase to $236.2 million—above consensus and our $233.0 million estimate and was strong across the board. Non-GAAP EPS of $0.40 beat consensus of $0.36 (our $0.39), but included $0.04 from adoption of FASB Accounting Standard Update (ASU)—overall earnings quality, however, was good with a 60bp improvement in operating margin and a 20bp improvement in EBITDA margin to 25.4%. The company is raising revenue guidance by $34 million, to $962 million (consensus was at $936 million), which includes $27 million from the Biotronic acquisition less $3 million from FX headwinds. Non-GAAP EPS guidance is increased $0.16, to $1.64, but this includes $0.15 from ASU, approximately $0.04 from the Biotronic acquisition, offset by about $0.03 from the increased share count. Nonetheless, the outlook in terms of revenue growth and margin improvement continues to look solid. We are raising our target to $70 from $60, based on the upper end of a 14-15x 2017 EV/EBITDA—we are assuming a 26.5% (from prior 26%) EBITDA margin. Reiterate Buy."

For an analyst ratings summary and ratings history on NuVasive click here. For more ratings news on NuVasive click here.

Shares of NuVasive closed at $62.00 yesterday.

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