Morgan Joseph Downgrades Myriad Genetics (MYGN) from Buy to Sell; Lowers Estimates

July 1, 2009 10:13 AM EDT

Morgan Joseph downgrades Myriad Genetics, Inc. (Nasdaq: MYGN) from Buy to Sell. Price target $24.

Morgan analyst says, "We are downgrading MYGN to a Sell following the lower-than-expected revenue preannouncement yesterday...The recession and rising unemployment are being blamed by the company for the slower-than-anticipated growth. It is also possible that the most likely individuals to be driven by Myriad's DTC ads to undergo BRACanalysis (the low hanging fruit) have now been exhausted, leading to slower growth. In either case, the visibility on growth drivers remains low as the company does not disclose the breakdown of revenues from various products."

"We are lowering our revenue estimate to $410 million from $471 million for CY10. Consequently, our normalized EPS estimate for CY10 falls from $1.67 to $1.21. Due to the successive slowdown in growth, we have reduced confidence in our estimates going forward. Further, since the slowdown seems to be caused by higher unemployment, it may take several quarters for growth to resume...However, if we include normalized tax expenses (37%) to calculate CY09 and CY10 EPS estimates, we obtain normalized EPS of $1.07 for 2009 and $1.21 for 2010."

To see more analyst ratings on MYGN Click Here.

Myriad Genetics, Inc. is a healthcare company focused on the development and marketing of molecular diagnostic and therapeutic products.

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