Needham & Company Raises Price Target on St. Jude Medical (STJ) Following Strong 1Q Results
Needham & Company reiterated a Strong Buy rating on St. Jude Medical (NYSE: STJ), and raised the price target to $75.00 (from $70.00), following the company's 1Q earnings report. STJ reported revenue of $1.448B, ahead of the consensus estimate of $1.436B. EPS was reported at $0.90 compared to consensus of $0.88. Management raised its 2016 EPS guidance to $4.01-4.11 from $3.95-4.05 (vs. consensus of $4.00) given the smaller currency headwind.
Analyst Mike Matson commented, "STJ's 1Q16 revenue and EPS were above consensus and management raised guidance. As expected, cardiac rhythm management (CRM) sales remained weak given STJ's lack of MRI pacemakers (now expected in 2H16) and ICDs (expected in 1H17). Positives include strong growth in Neuromodulation (up 10% CC) and LVADs (up high teens CC). We believe that STJ's revenue growth has bottomed and we expect it to accelerate over the next 12 months as STJ addresses its CRM product gaps and launches a number of other new products. Despite this, STJ's P/E multiple remains at a large discount to peers and we reiterate our Strong Buy rating."
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Shares of St. Jude Medical closed at $58.60 yesterday.