Leerink Partners Cuts Price Target on Cynosure (CYNO) Following Solid 3Q
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Leerink Partners maintained an Outperform rating on Cynosure (NASDAQ: CYNO), and cut the price target to $60.00 (from $63.00), following the company's 3Q earnings report. 3Q Was Highlighted by Solid revenue outperformance and a Modest EPS Beat. Sales of $106.4M beat consensus' $101.9M mostly driven by upside from the OUS division. The sales upside drove a $0.01 EPS beat vs. consensus' $0.28.
Analyst Richard Newitter commented, "We reiterate our OP rating and view today's sell-off as a buying opportunity following an overall solid 3Q performance. While EPS leverage was not as meaningful as it has been in prior quarters, we do think it is the right business decision for CYNO to be reinvesting given sizeable growth opportunities/markets in front of the company, particularly in non-invasive (NI) fat. Our model now contemplates a more aggressive spending outlook (even as revenue forecasts move higher). Still, we forecast CYNO to deliver +27% on the top line and +17% EPS growth in 2016, and in 2017 we project ~10% growth on the top-line (at least) and +35% on the bottom line. To us, this is a misvalued growth profile trading at ~1.7x 2017E EV/Sales (26x '17 P/E) and 1.6x 2018E EV/Sales (22x P/E). Our PT goes to $60 (vs. $63) on slightly lower group multiple in light of recent market weakness in MedTech."
Shares of Cynosure closed at $43.59 yesterday.
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