UPDATE: Canaccord Genuity Upgrades Genomic Health Inc. (GHDX) to Buy

(Updated - January 6, 2016 9:29 AM EST)

Canaccord Genuity upgraded Genomic Health Inc. (NASDAQ: GHDX) from Hold to Buy with a price target of $44. A proprietary Canaccord survey indicated Genomic Health's prostate test will spur growth.

Analyst Mark Massaro explained, "We upgrade Genomic Health (GHDX) to BUY from Hold based on our proprietary interviews and survey which suggests that GHDX is likely to make strong inroads with urologists selling its Oncotype Dx prostate cancer test following its national Medicare reimbursement decision, effective October 13 2015. Our model assumes that GHDX captures what we view as a reasonable 4% and 7% of the $500M+ US prostate market opportunity over the next two years, which in our model, assumes the OncotypeDx Prostate test adds an incremental $22M (6.5% of revs) and $33M (9% of revs) to its top line in 2016 and 2017, respectively."

"While GHDX leverages 90% market share (and 60% penetration) in its invasive breast test business, we are optimistic GHDX has strong growth ahead given ~5% penetration of its segments in prostate cancer, DCIS breast cancer, and internationally. We look for GHDX to continue strong momentum following its strong +17% volume growth at Q3, its strongest volume growth quarter in two years. We believe GHDX can achieve strong growth from its prostate test even with other worthy tests on the market," added the analyst.

For an analyst ratings summary and ratings history on Genomic Health Inc. click here. For more ratings news on Genomic Health Inc. click here.

Shares of Genomic Health Inc. closed at $34.01 yesterday.

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