Jefferies Cuts Price Target on NuVasive (NUVA), Highlights Details with Medtronics (MDT)
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Price: $39.75 --0%
Rating Summary:
11 Buy, 21 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
11 Buy, 21 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Jefferies is reiterating its Buy rating on shares of NuVasive (NASDAQ: NUVA), but is lowering its price target from $36 to $30.
The firm notes that Medtronic (NYSE: MDT) won round one of fifteen in its prize fight with NUVA. A jury found that the three patents asserted by Medtronic and the one by NuVasive were valid and infringed by the other party and each party was issued damages.
The royalty rates amounted to $101 million in damages owed by NUVA and $600 thousand in damages owed by MDT. The jury did not decide on ongoing royalties.
There are six patents left to be litigated from Medtronic and three from NuVasive while two are under reexamination by the patent office following Medtronic’s request.
An analyst at Jefferies highlights, "Both sides will again make their cases and the judge will issue a final judgment with the ongoing rates each party will pay. While there is a chance the royalty could be worse, there is also a chance the judge could reduce them. Also, the highest royalty rate, 10%, is on the largest chunk of revenue; any increases in the royalties on the other two patents would not add much to the total."
For 2011 and 2012, Jefferies has reduced its EPS estimates from $0.52 and $0.87 to $0.47 and $0.74.
For more ratings news on NuVasive click here and for the rating history of NuVasive click here.
Shares of NuVasive closed at $19.04 yesterday.
The firm notes that Medtronic (NYSE: MDT) won round one of fifteen in its prize fight with NUVA. A jury found that the three patents asserted by Medtronic and the one by NuVasive were valid and infringed by the other party and each party was issued damages.
The royalty rates amounted to $101 million in damages owed by NUVA and $600 thousand in damages owed by MDT. The jury did not decide on ongoing royalties.
There are six patents left to be litigated from Medtronic and three from NuVasive while two are under reexamination by the patent office following Medtronic’s request.
An analyst at Jefferies highlights, "Both sides will again make their cases and the judge will issue a final judgment with the ongoing rates each party will pay. While there is a chance the royalty could be worse, there is also a chance the judge could reduce them. Also, the highest royalty rate, 10%, is on the largest chunk of revenue; any increases in the royalties on the other two patents would not add much to the total."
For 2011 and 2012, Jefferies has reduced its EPS estimates from $0.52 and $0.87 to $0.47 and $0.74.
For more ratings news on NuVasive click here and for the rating history of NuVasive click here.
Shares of NuVasive closed at $19.04 yesterday.
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