Deutsche Bank Upgrades Affymetrix (AFFX) to Hold; Risk/Reward Appears Balanced

November 4, 2009 8:20 AM EST

Deutsche Bank upgrades Affymetrix (Nasdaq: AFFX) from Sell to Hold. Price target $6.50

Deutsche analyst says, "We are upgrading AFFX to Hold as we believe risk/reward now appears fairly balanced at current valuation levels. Shares have meaningfully underperformed the broader market over the last 3 months, declining ~43% vs. a 5% gain for the S&P 500. While we remain concerned with the prospects of AFFX's next-gen platforms and its ability to generate meaningful earnings over the medium term, we contend that the recent correction now accurately reflects this reality."

"Given the recent correction in AFFX shares (~40% decline), we now believe that many of those risks are accurately captured in current valuation. Shares now trade at an EV/revenue multiple of roughly 1.00x on FY10 sales, which should prove to be a near-term trough for valuation. While the risks to AFFX are certainly real, we contend that the current implied valuation of 1.00x EV/Sales now adequately reflects these risks and are therefore upgrading AFFX to Hold."

To see more analyst ratings on AFFX Click Here.

Affymetrix, Inc. engages in the development, manufacture, sale, and servicing of consumables and systems for genetic analysis in the life sciences and clinical healthcare markets.

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