Needham & Company Maintains a 'Hold' on Forest Laboratories (FRX); Modest Launch Performance, Increased OpEx Combine to Reveal Softness & Rare EPS Miss

Needham & Company maintains a 'Hold' on Forest Laboratories (NYSE: FRX).

Needham analyst says, "In the rarest of events, FRX missed our top- and bottom-line expectations for 2QFY12 (September) though only EPS fell short of Street consensus ($0.91 vs. $0.99). FRX has only missed top- or bottom-line expectations once in over five years so while management’s reiteration of full-year guidance ($3.60-$3.70) suggests that "everything is on track", results highlight potential for continued short-term softness in numbers as FRX ramps up spending in support of new product launches and the performance of new product launches tracks modestly below early forecasts. Given trough valuation on near-term numbers, the early stage of new product launches coupled with reiteration of guidance, it’s unlikely shares will be severely punished on the miss though upside based on new product dynamics is clearly at least several quarters away." (Needham lowers FY12 EPS estimate from $3.67 to $3.60)

For more ratings news on Forest Laboratories click here and for the rating history of Forest Laboratories click here.

Shares of Forest Laboratories closed at $31.47 yesterday.

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