UPDATE: Credit Suisse Upgrades Volcano Corp. (VOLC) to Outperform

(Updated - November 17, 2014 10:59 AM EST)

Credit Suisse upgraded Volcano Corp. (NASDAQ: VOLC) from Neutral to Outperform with a price target of $14 (from $16).. Analyst Bruce Nudell called Volcano's valuation "undemanding."

"Our VOLC upgrade is based on 3 factors: 1) the belief that VOLC's August long-term sales growth targets are likely achievable (if not beatable), suggesting limited downside to consensus (which assumes 1.8% sales growth in 2015 roughly consistent with 2014 growth despite multiple new product launches & the lapping of Japanese price cuts to help offset FFR competition), 2) VOLC's more dedicated approach to margin expansion suggests a meaningful intermediate-term profitability ramp & seems to mitigate the risk from M&A execution," said Nudell.

"3) favorable valuation (as described below). We're lowering our 2015 sales estimates to $408.3M (5.4% CC) from $417.2M (7.6% CC) on lower assumed FFR share & the assumption of increased pricing pressure (we've assigned ~2% FFR share to ACIST in 2015, increasing over time), which implies a lowering of our 2014-17 total sales CAGR to 5.0% from 6.4%; however, we still believe there's likely to be nice potential upside to shares if VOLC can meet our above-consensus sales targets. We're lowering our DCF-based price target to $14 from $16 on our lowered estimates," he added.

For an analyst ratings summary and ratings history on Volcano Corp. click here. For more ratings news on Volcano Corp. click here.

Shares of Volcano Corp. closed at $10.92 yesterday.

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