Needham & Company Maintains a 'Hold' on Hi Tech Pharmacal (HITK); Q4 Mixed; Flonase Beginning To Show Its Age

July 11, 2012 8:22 AM EDT
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Price: $43.49 --0%

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Needham & Company maintains a 'Hold' on Hi Tech Pharmacal (NASDAQ: HITK).

Analyst, Elliot Wilbur, said, "Despite another very strong generic Flonase quarter enabling HITK to easily outpace top-line expectations, 4QF12 EPS came up short of our numbers owing to light gross margin and accelerated investment spend. While signs of imminent new competition on generic Flonase remain few and far between, 4QF12 sales almost certainly represented a peak quarter both on an absolute and relative basis and while our assumption of an 11% y/y decline in Flonase sales appears reasonable, we remain concerned about the possibility of downside surprises to our EPS forecast given accelerated investment spend both in SG&A and R&D, implying little P&L “give” for negative top-line variances. Though shares resiliently shook off another soft quarter, they are likely to remain highly captive to any and all generic Flonase developments for the foreseeable future."

FY13 EPS estimate cut from $3.63 to $3.32 and FY14 from $3.71 to $3.68.

For an analyst ratings summary and ratings history on Hi Tech Pharmacal click here. For more ratings news on Hi Tech Pharmacal click here.

Shares of Hi Tech Pharmacal closed at $29.97 yesterday.

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