Wells Fargo Upgrades Symmetry Medical (SMA) to Market Perform; Cycle Has Bottomed
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Wells Fargo upgrades Symmetry Medical Inc. (NYSE: SMA) to Market Perform. Valuation range increased from $6-7 to $7-9.
Wells analyst says, "Orthopedic industry inventory growth and capital expenditure declines both started to slow in Q3 2009. Additionally, our estimates for SMA are now slightly ahead of consensus. And SMA (at 11.7x our 2010 EPS estimate) is now trading at a 19% discount to its large-cap orthopedics customers' (at a median of 14.4x 2010 consensus EPS estimates) versus a 9% average discount over the past five years...We note that our 2010 estimates are now slightly ahead of consensus. Our revenue estimate is $356MM (versus consensus of $350MM) and our EPS estimate is $0.68 (versus consensus of $0.64). We had been concerned that the Street might not cut estimates enough but this no longer appears valid...SMA is enduring the effects of an inventory correction at its customers. But we think this cycle is bottoming and sales growth could rebound by late 2010."
To see all the upgrades/downgrades on shares of SMA, visit our Analyst Ratings page.
Symmetry Medical, Inc. designs, develops, and produces implants and related surgical instruments and cases to orthopedic device manufacturers worldwide.
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