Needham & Company Maintains a 'Hold' on Hi Tech Pharmacal (HITK); Upside Momentum Stalls Out In 3Q
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Price: $43.49 --0%
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Hold' on Hi Tech Pharmacal (NASDAQ: HITK).
Analyst, Elliot Wilbur, said, "After delivering a series of bottom-line upside surprises over the last six quarters, 3QFY12 EPS topped our low-end number though fell short of consensus as lower-than-expected gross margin trends and increased SG&A spend outpaced a modest top line beat. Despite the whiff of increasing competition on HITK’s key franchise generic fluticasone nasal spray following Wockhardt’s approval in early 4QFY12, management indicated that little has changed in terms of overall pricing/volume dynamics, suggesting that the current quarter run rate should at least continue headed into a stronger seasonal period. While the market’s worst case initial fears have come nowhere close to playing out since the Wockhart approval and management outlined a series of potential near-term small positive product catalysts on the horizon, we believe the competitive dynamic around generic Flonase will continue to be the dominating factor in shares. Absent clear evidence that incremental new approvals can more than offset potential downside risk to fluticasone sales, we believe shares will struggle to hold levels above $40 and we maintain our neutral posture pending share prices hitting more opportunistic accumulation levels."
For an analyst ratings summary and ratings history on Hi Tech Pharmacal click here. For more ratings news on Hi Tech Pharmacal click here.
Shares of Hi Tech Pharmacal closed at $39.63 yesterday.
Analyst, Elliot Wilbur, said, "After delivering a series of bottom-line upside surprises over the last six quarters, 3QFY12 EPS topped our low-end number though fell short of consensus as lower-than-expected gross margin trends and increased SG&A spend outpaced a modest top line beat. Despite the whiff of increasing competition on HITK’s key franchise generic fluticasone nasal spray following Wockhardt’s approval in early 4QFY12, management indicated that little has changed in terms of overall pricing/volume dynamics, suggesting that the current quarter run rate should at least continue headed into a stronger seasonal period. While the market’s worst case initial fears have come nowhere close to playing out since the Wockhart approval and management outlined a series of potential near-term small positive product catalysts on the horizon, we believe the competitive dynamic around generic Flonase will continue to be the dominating factor in shares. Absent clear evidence that incremental new approvals can more than offset potential downside risk to fluticasone sales, we believe shares will struggle to hold levels above $40 and we maintain our neutral posture pending share prices hitting more opportunistic accumulation levels."
For an analyst ratings summary and ratings history on Hi Tech Pharmacal click here. For more ratings news on Hi Tech Pharmacal click here.
Shares of Hi Tech Pharmacal closed at $39.63 yesterday.
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