Goldman Sachs Downgrades Alere (ALR) to Sell

Goldman Sachs downgraded Alere (NYSE: ALR) from Neutral to Sell with a price target of $29.00.

Analyst Isaac Ro said, "While growth and margins should improve modestly in 2015, we take a below-consensus view on revenue/EPS for the next few years. In particular, we see challenging yoy comps in 2H14 which we think will be exacerbated by material organization change. On valuation, we believe a discounted multiple to the S&P is warranted given high leverage, elevated goodwill balances relative to market cap, low returns, and earnings volatility."

"While we are optimistic that recent regulatory challenges (Triage and INR recalls) will dissipate and enable improved organic growth/margins in 2015 (we forecast 170bps of operating margin expansion), we believe ALR’s long-term growth outlook will remain difficult to gauge for several quarters. Meanwhile, we see risk to 2H consensus estimates as yoy comps look difficult particularly given the magnitude of organizational change. Our 2014/2015 EPS estimates stand 6.1%/12.9% below consensus," added the analyst.

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

Shares of Alere closed at $36.24 yesterday.

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