Jefferies Cuts Price Targets on WuXi PharmaTech (WX), Outlook Remains Strong Following Acquisitions

Jefferies is reaffirming its Buy rating on shares of WuXi PharmaTech (NYSE: WX) while lowering its price target from $20 to $17.

The company reported strong Q3 results with 24 percent revenue and earnings topping expectations by $0.02 per share. The firm notes the revenue growth was largely due to the commercial launch of telaprevir.

WuXi PharmaTech acquired Abgent and MedKey for $13 million during the quarter and the firm notes, "These deals put in place the necessary infrastructure to support future organic growth across the platform."

An analyst at Jefferies comments, "WuXi has established a $50 million venture fund to invest in new, China-based technologies. The market has traditionally not favored types of deals. We like that WX is a small co-investor with larger, more established venture lead investors. WX's new business will also likely benefit from the portfolio companies."

The firm tweaked its 2011 and 2012 EPS estimates from $1.03 and $1.17 to $1.04 and $1.15. Revenue for the two years is forecasted to be $405.7 million and $447.8 million.

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

Shares of WuXi PharmaTech closed at $12.00 yesterday.

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