Needham & Company Cuts Numbers on Hi Tech Pharmacal (HITK) After Latest Miss
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Price: $43.49 --0%
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Needham & Company reiterated a Hold rating and lowered estimates on Hi Tech Pharmacal (NASDAQ: HITK) Wednesday, following another EPS miss as the Flonase "gavy train" coming to an end.
Analyst Elliot Wilbur comments, "Despite another large scale EPS miss and increasing risk of continued deterioration of near-term earnings power, we are maintaining our Hold rating on shares. Admittedly our comfort level with shares at current levels is rapidly deteriorating and we remain concerned that the generic Flonase "gravy train" is coming to an end. We believe shares have limited upside potential from current levels outside a major transformational acquisition or new generic approval while we believe downside risk to numbers continues to grow even despite a near 50% decline in underlying EPS power over the past 3 years. Buffeting the downside is a substantial cash balance (over $100.0MM) as well as not insignificant premia owing to continued robust M&A activity in the space. Valuation is propped by far many more what if’s than reflective of what is, in our view, and with current P/E levels returning to 3-year highs, multiple risk is increasingly elevated in light of a 50% diminishment in EPS power over the past two years."
The firm cut FY 2014 EPS estimate from $2.78 to $2.33 and FY 2015 from $3.30 to $2.79.
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 $35.25 yesterday.
Analyst Elliot Wilbur comments, "Despite another large scale EPS miss and increasing risk of continued deterioration of near-term earnings power, we are maintaining our Hold rating on shares. Admittedly our comfort level with shares at current levels is rapidly deteriorating and we remain concerned that the generic Flonase "gravy train" is coming to an end. We believe shares have limited upside potential from current levels outside a major transformational acquisition or new generic approval while we believe downside risk to numbers continues to grow even despite a near 50% decline in underlying EPS power over the past 3 years. Buffeting the downside is a substantial cash balance (over $100.0MM) as well as not insignificant premia owing to continued robust M&A activity in the space. Valuation is propped by far many more what if’s than reflective of what is, in our view, and with current P/E levels returning to 3-year highs, multiple risk is increasingly elevated in light of a 50% diminishment in EPS power over the past two years."
The firm cut FY 2014 EPS estimate from $2.78 to $2.33 and FY 2015 from $3.30 to $2.79.
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 $35.25 yesterday.
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