Piper Jaffray Downgrades Myriad Genetics (MYGN) to Neutral
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Piper Jaffray downgraded Myriad Genetics (NASDAQ: MYGN) from Overweight to Neutral with a price target of $22.00 (from $47.00).
Analyst William Quirk commented, "Myriad's 4Q16 revenue declined 1.8% yoy to $186.5M, below our in line estimate of $187.7M. EPS of $0.36 was below our in line $0.37 estimate. Hereditary Cancer declined 6.7% due to share losses in the oncology business and higher sales force turnover. Management guided FY17 to -7.1% yoy core business revenue decline at the midpoint with FY17 revenue guidance well below consensus ($740M-$760M; Street: $791.8M). Guidance assumes $50M from Assurex, while this was not in Street forecasts. EPS guidance of $1.00-$1.10 (Street: $1.77) includes $0.20 of dilution from the Assurex transaction. While we believe PAMA may ultimately benefit Myriad, we expect reimbursement risk combined with sales force losses will put pressure on the organization for the near term. Thus, we are downgrading to Neutral from Overweight and lowering our price target to $22 (was $47) based on ~17x our revised CY17E EPS (was ~20x CY17E EPS) with the reduced multiple reflecting reimbursement uncertainty."
Shares of Myriad Genetics closed at $29.46 yesterday.
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