Deutsche Bank Upgrades Genzyme (GENZ) to Buy; Myozyme Delays Create Buying Opportunity

March 9, 2009 7:31 AM EDT

Deutsche Bank upgrades Genzyme (Nasdaq: GENZ) to Buy with a $63 price target, citing valuation after recent share slide.

Deutsche analyst says, "GENZ has dropped >20% in the past month driven by: 1) price erosion; 2) worries over further delays in Myozyme's 2000L plan; 3) dilution overhang from potential business development activities. We stretched our model with very conservative assumptions to account for these issues. The result was adjusted 2010 EPS of $4.37 with a P/E of 12.2x(13% discount to peers) & a DCF based target of $63 which suggests that recent stock rundown is overdone...We forecast 2013 total revenues of $7.1B (09-13 cagr of 9%) declining to $6.8B by 2018 (13-18 CAGR of -1%). When we include annual business development expense of $400M we calculate 08-13 Adjusted EPS CAGR of 17% and FCF of $0.5B for 2009 growing to $1.4B by 2013. Our adjusted 2010 EPS of $4.37 represents a P/E of 12.2x (13% discount to peers) while 2010 FCF/sh of $2.98 represents a yield of 6%."

To see more analyst ratings on GENZ Click Here.

Genzyme Corporation (Genzyme) is a biotechnology company. Genzyme operates in four segments: Genetic Diseases, Cardiometabolic and Renal, Biosurgery and Hematologic Oncology.

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