Canaccord Genuity Q4 Ortho Preview: Comments on ATEC, BMTI, EXAC, IART, RTIX, SYK, TSON & ZMH
SYK Hot Sheet
Rating Summary:18 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 16 | New: 82
Canaccord Genuity Q4 Ortho Preview: Analyst, Jason R. Mills, comments on some companies currently covered by the firm
Stryker (NYSE: SYK) (BUY) released preliminary Q4/11 results that were in line wth our and consensus estimates. Our $69.50 price target is derived from a 16.9x multiple applied to our 2012 pro forma EPS estimate of $4.11.
Net, net we expect TranS1 (Nasdaq: TSON) (HOLD) to report Q4/11 results line with our and consensus expectations . Our $3.00 price target is based on a 1.8x EV/Sales multiple applied to our 2012 revenue estimate of $20.7M.
Net, net, we expect Zimmer (NYSE: ZMH)(BUY) to report Q4/11 results below expectations due to sluggish procedure volumes despite a rebounding hip business and stabilized knee business. Our $67.00 price target is based on a multiple of 13.0x applied to our 2012 pro forma EPS projection of $5.17.
We expect RTI (Nasdaq: RTIX)(BUY) to report results in line with current expectations, with supply constraints preventing any outperformance in Sports Medicine. Our $5.25 price target utilizes the 2012 small cap med tech PE multiple of 30.7x applied to our 2012 GAAP EPS estimate of $0.17.
Weak Q4/11 preannounced, slower growth expected for 2012, Integra (Nasdaq: IART)(BUY, PT $40) released disappointing preliminary Q4/11 results with revenues well below our and consensus expectations. Management noted the miss was due to weakness in instruments, US extremity, and international businesses.
We expect Exactech (Nasdaq: EXAC)(BUY) to report an in-line quarter, but note that lumpy OUS revenues could cause some lightness. Our $27.00 price target is based on a 24.0x P/E multiple applied to our C2012 GAAP EPS estimate of $1.14.
We think Alphatec (Nasdaq: ATEC) (BUY) will report results in line with or better than expectations, demonstrating the company is on a path to return to above-market growth and become profitable barring further deterioration of the spine market. We believe the company is positioned to meet its target with or without the contributions of PureGen or Solus. Our $3.50 price target is based on a 1.7x EV/sales multiple applied to our 2012 revenue estimate of $207.7M.
BioMimetic Therapeutics’ (Nasdaq: BMTI)(BUY) story is built on the company’s ability to bring its novel Augment technology to market. The near-term catalysts for the name include an EU decision on the approvability of Augment as well as a resubmission of the FDA PMA amendment. Our $2.50 price target is based on the average of a 1.8 multiple and 31.5x multiple applied to our C2019 revenue and EPS estimates, respectively, discounted back at 35% per year.
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Stryker (NYSE: SYK) (BUY) released preliminary Q4/11 results that were in line wth our and consensus estimates. Our $69.50 price target is derived from a 16.9x multiple applied to our 2012 pro forma EPS estimate of $4.11.
Net, net we expect TranS1 (Nasdaq: TSON) (HOLD) to report Q4/11 results line with our and consensus expectations . Our $3.00 price target is based on a 1.8x EV/Sales multiple applied to our 2012 revenue estimate of $20.7M.
Net, net, we expect Zimmer (NYSE: ZMH)(BUY) to report Q4/11 results below expectations due to sluggish procedure volumes despite a rebounding hip business and stabilized knee business. Our $67.00 price target is based on a multiple of 13.0x applied to our 2012 pro forma EPS projection of $5.17.
We expect RTI (Nasdaq: RTIX)(BUY) to report results in line with current expectations, with supply constraints preventing any outperformance in Sports Medicine. Our $5.25 price target utilizes the 2012 small cap med tech PE multiple of 30.7x applied to our 2012 GAAP EPS estimate of $0.17.
Weak Q4/11 preannounced, slower growth expected for 2012, Integra (Nasdaq: IART)(BUY, PT $40) released disappointing preliminary Q4/11 results with revenues well below our and consensus expectations. Management noted the miss was due to weakness in instruments, US extremity, and international businesses.
We expect Exactech (Nasdaq: EXAC)(BUY) to report an in-line quarter, but note that lumpy OUS revenues could cause some lightness. Our $27.00 price target is based on a 24.0x P/E multiple applied to our C2012 GAAP EPS estimate of $1.14.
We think Alphatec (Nasdaq: ATEC) (BUY) will report results in line with or better than expectations, demonstrating the company is on a path to return to above-market growth and become profitable barring further deterioration of the spine market. We believe the company is positioned to meet its target with or without the contributions of PureGen or Solus. Our $3.50 price target is based on a 1.7x EV/sales multiple applied to our 2012 revenue estimate of $207.7M.
BioMimetic Therapeutics’ (Nasdaq: BMTI)(BUY) story is built on the company’s ability to bring its novel Augment technology to market. The near-term catalysts for the name include an EU decision on the approvability of Augment as well as a resubmission of the FDA PMA amendment. Our $2.50 price target is based on the average of a 1.8 multiple and 31.5x multiple applied to our C2019 revenue and EPS estimates, respectively, discounted back at 35% per year.
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