Canaccord Genuity Raises Price Target on Cyberonics (CYBX) Following a 10c EPS Beat
Canaccord Genuity reiterated a Hold rating on Cyberonics (NASDAQ: CYBX), and raised the price target to $67.00 (from $65.00), following the company's 1Q16 earnings results. Net sales of $81.0M beat Street's $76.78M estimates. Adjusted EPS of $0.72 came in above the Street’s $0.62 projection.
Analyst Jason Mills commented, "Cyberonics reported solid FQ1/16 results that rebounded from several quarters of slowing growth as momentum returned to the U.S. business, driven by strong adoption of the recently launched AspireSR system in the domestic market. U.S. lead sales declined 1.5% Y/Y, but management cautioned on the use of this metric as a proxy for new patient implants and noted that an internal analysis indicated that new patient implants increased more than the lead number suggests. While one quarter is not a trend, we think that FQ1 is an encouraging sign that growth rates in the U.S. business may pick back up as the company annualizes the impact of competitive headwinds and the adoption of AspireSR continues. Importantly, management commented that there continues to be significant activity and progress on the planned merger with Sorin, not the least of which was the dismissal of the Italian State’s Attorney’s objection to the merger, thus removing a potential roadblock and allowing the transaction to move forward. We believe that initial guidance of the combined entity (LivaNova plc), coupled with improved growth in CYBX’s U.S. business, will invigorate investor attention on the company later this year and we are keeping an open mind about the stock pending more detailed information in a few months. We maintain the HOLD rating and increase our price target to $67 on CYBX common."
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Shares of Cyberonics closed at $64.74 yesterday.