Auriga Maintains a 'Buy' on CareFusion (CFN); Selling Neurodiagnostic Division Creates Less ConFusion
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Price: $59.91 --0%
Rating Summary:
2 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Auriga maintains a 'Buy' on CareFusion (NYSE: CFN) price target of $28.00.
Analyst, Gene Mannheimer, said, "Yesterday CareFusion announced the sale of its neurodiagnostic systems business to Natus Medical (Nasdaq: BABY)(NotRated) for $58 million. The deal strengthens Natus' neurology portfolio and enhances its international presence, as roughly 50% of the business unit's revenues derive from outside the United States. Specific to CareFusion, the transaction is consistent with CFN's attempt to simplify its business structure by shedding non-core assets. We are making no changes to estimates at this time but the transaction should shave $95-$100 million from revenue. Meanwhile, we look to earnings next week for guidance with respect to our model. The transaction is expected to close in July. Less ConFusion: CFN's neurodiagnostic business, called Nicolet, employed 400 people in Madison, Wisconsin and generated 2011 revenues of $95 million. Natus is paying 0.6x revenue for Nicolet. The sale is consistent with CFN's strategy of divesting non-core businesses that were inherited in the spinoff by Cardinal Health (NYSE: CAH)(NotRated) in late 2000."
For an analyst ratings summary and ratings history on CareFusion click here. For more ratings news on CareFusion click here.
Shares of CareFusion closed at $25.42 yesterday.
Analyst, Gene Mannheimer, said, "Yesterday CareFusion announced the sale of its neurodiagnostic systems business to Natus Medical (Nasdaq: BABY)(NotRated) for $58 million. The deal strengthens Natus' neurology portfolio and enhances its international presence, as roughly 50% of the business unit's revenues derive from outside the United States. Specific to CareFusion, the transaction is consistent with CFN's attempt to simplify its business structure by shedding non-core assets. We are making no changes to estimates at this time but the transaction should shave $95-$100 million from revenue. Meanwhile, we look to earnings next week for guidance with respect to our model. The transaction is expected to close in July. Less ConFusion: CFN's neurodiagnostic business, called Nicolet, employed 400 people in Madison, Wisconsin and generated 2011 revenues of $95 million. Natus is paying 0.6x revenue for Nicolet. The sale is consistent with CFN's strategy of divesting non-core businesses that were inherited in the spinoff by Cardinal Health (NYSE: CAH)(NotRated) in late 2000."
For an analyst ratings summary and ratings history on CareFusion click here. For more ratings news on CareFusion click here.
Shares of CareFusion closed at $25.42 yesterday.
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