UPDATE: Thoratec (THOR) Stronger; UBS Ups to 'Buy', Says Stock Inexpensive an Makes a Viable Buyout Target

October 3, 2012 6:45 AM EDT Send to a Friend
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Price: $25.71 +0.86%

Rating Summary:
    12 Buy, 15 Hold, 0 Sell

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(Updated - October 3, 2012 12:16 PM EDT)

Shares of Thoratec (NASDAQ: THOR) are notably higher Wednesday after a bullish call from UBS.

UBS lifted its rating on the medical device company from Neutral to Buy and boosted its price target from $35 to $39 saying the stock looks inexpensive given its strong position.

"While growth will likely be dampened over the next few yrs due to competition, valuation already reflects a downside case, in our view," analyst Rajeev Jashnani commented. "Results from our LVAD survey leave us more confident in THOR's share position as well as ability to grow through the HVAD launch. As shares have been range-bound over the past 2 years (despite cumulative rev/EPS growth of 27%/ 43%), we believe that simply achieving Street ests should facilitate multiple expansion."

Jashnani expects HVAD to garner 32% of US BTT (bridge to transplant ) share in 2013. "Our 2013 revs/EPS ests for THOR are $499M/$1.80 vs. Street's $495M/$1.77. If we assume 40% HVAD share, resulting revs/EPS are $482M/$1.68. While upside in the stock may not be realized should this scenario play out, we believe THOR shares are still fairly inexpensive on these estimates, helping to limit down side (THOR could buffer EPS with more share repo)," the analyst notes.

The firm also views Thoratec as a viable acquisition candidate.

For an analyst ratings summary and ratings history on Thoratec click here. For more ratings news on Thoratec click here.

Shares of Thoratec are up 3.35 percent to $35.44.


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