Wells Fargo Upgrades Orthofix International N.V. (OFIX) to Market Perform

November 3, 2009 7:01 AM EST

Wells Fargo upgrades Orthofix International N.V. (Nasdaq: OFIX) from Underperform to Market Perform. Valuation range increased from $28-30 to $29-34.

Wells analyst says, "Our upgrade is driven by better than expected results from OFIX's spine business which has now had two consecutive quarters of double digit revenue growth. Additionally, our concerns about distributor destocking and guidance have proven unfounded. Valuation and risk to 2010 EPS estimates keep us from getting more positive on OFIX shares, however...OFIX has now successfully navigated the transition from Trinity to Trinity Evolution, addressing another one of our concerns. Looking forward, we expect OFIX's spine implant and biologics business to grow at least in line with the spine market (i.e. low-teens growth)...But We Do See Several Risks To 2010 EPS Estimates... OFIX expects $0.8MM in Q4 2009 legal expenses due to the industry's bone growth stimulation investigation. If legal expenses remain at this run rate in 2010, we would expect a $0.11 drag on 2010 EPS."

To see more analyst ratings on OFIX Click Here.

Orthofix International N.V. designs, develops, manufactures, markets, and distributes medical equipment, principally for the orthopedic applications.

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