Nomura Securities Starts Grifols, S.A. (GRFS) at Buy

Nomura Securities initiates coverage on Grifols, S.A. (NASDAQ: GRFS) with a Buy rating and EUR 23 price target.

Analyst Ed Ridley-Day commented, "We initiate coverage of GRF with a Buy rating and EUR 23 target price. Although we are cautious on the outlook for the diagnostics business (18% 2015E group revenues), we believe that the underlying fundamentals supporting demand for plasma-derived therapies remains strong and forecast 5.8% 2015-20 revenue CAGR for the bioscience division (77.5% of 2015E group revenues). The company should benefit from continued double-digit growth in demand for A1P1 (c18-19% of bioscience revenues), a protein that treats a genetic disorder affecting the lungs and liver, and a return to growth in its haemophilia business. Bioscience-manufacturing profitability should be enhanced steadily through 2H16/2017 by the continued switch to a new product facility in North Carolina, helping to offset pricing pressure in the IVIG (intravenous immunoglobulin) market, increased competition in the diagnostic business, ongoing investment in additional capacity and the end of diagnostic royalties in 4Q15. We forecast FY16-18 EPS CAGR of 10.4%, broadly in line with the global Medtech average of c11% and valuation appears supportive with GRF on 18.5x our FY17E adjusted EPS, an -11% discount to the EU Medtech sector. "

For an analyst ratings summary and ratings history on Grifols, S.A. click here. For more ratings news on Grifols, S.A. click here.

Shares of Grifols, S.A. closed at $15.09 yesterday.

You May Also Be Interested In

• Nomura/Instinet Starts Clean Max Enviro Energy Solutions (CLEANMAX:IN) at Buy
• BofA Securities Starts SBI Funds Management (SBIFUNDS:IN) at Buy
• Marvell (MRVL) PT Raised to $325 at Oppenheimer