UPDATE: UBS Starts Quidel Corp. (QDEL) at Sell

UBS analyst Elizabeth Garcia initiates coverage on Quidel Corp. (NASDAQ: QDEL) with a Sell rating and a price target of $86.00.

The analyst comments "We initiate coverage of QDEL with a Sell rating and price target of $86. We think that the combined margin profile post-merger and current spending levels have been less scrutinized by investors. We expect a steep drop in COVID-19 testing declines over upcoming quarters, there were ~4B COVID-19 tests performed in 2021 while a typical flu season pre-pandemic usually generated 50M tests. QDEL moved quickly to scale and meet COVID-19 needs with revenues reaching $1.7B in 2020/2021. In 2023E, we forecast revenues <$800M (<50%). Meanwhile, QDEL standalone has its SG&A + R&D burden annualizing at ~ $400M, >$150M above 2020 levels (+60%). In 2023E, cost synergies serve as some offset, but we land at sub-30%s EBITDA margin with Ortho Clinical's dilution fully baked in. At current stock levels, our reverse DCF indicates EBITDA margins in the ~33% range for 2023E-2026E versus our estimates at 29%."

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

Shares of Quidel Corp. closed at $105.20 yesterday.

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