Canaccord Adams Downgrades IRIS International (IRIS) to Hold

January 8, 2009 1:11 PM EST

Canaccord Adams downgrades IRIS International (Nasdaq: IRIS) from Buy to Hold. Price target lowered from $16 to $12.

Canaccord analyst says, "While the OUS launch of the VELOCITY is proceeding at a healthy clip, we believe IRIS management is in a bind as to 2009 guidance. With limited visibility into H2/09, we believe IRIS will likely offer conservative guidance, below current Street estimates, to account for the deteriorating US hospital capex spend environment (that likely has not materialized in Q4 results in part due to IRIS’ smaller domestic installed base). We view a conservative bar for 2009 as prudent, but may leave questions as to whether the new guidance is conservative enough. We lower our estimates, price target, and rating (to HOLD from Buy) until we can reasonably expect a general stabilization in hospital spending or additional company-specific catalysts (such as NADiA ProsVue) to drive a material acceleration in earnings growth."

IRIS International, Inc. designs, develops, manufactures and markets in vitro diagnostic (IVD) products, including IVD imaging systems based on neural network-based automated particle recognition (APR) software to enable high-speed digital processing to classify and display images and describe the morphology of microscopic particles urine chemistry analyzer and related chemistry test strips and accessories, molecular diagnostics assays based on its nucleic acid detection immuno-assay (NADiA) technology, as well as special purpose centrifuges and other small instruments for automating microscopic procedures and deoxyribonucleic acid (DNA) processing performed in clinical laboratories.

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