BTIG Reiterates Buy Rating on Hologic (HOLX) Despite Expecting Covid Testing to Fall Precipitously

BTIG analyst Sean Lavin reiterated a Buy rating and $91.00 price target on Hologic (NASDAQ: HOLX) while acknowledging the coming pressure from decreased COVID testing in the coming weeks/months. Shares are likely to see pressure over the coming few weeks as declining COVID-test demand outpaces HOLX's ability to offset the decline with increased alternative assay usage, recent M&A, and increased Breast Health and GYN-Surgical businesses resuming to normalized levels.

The analayst stated "Until we know how COVID-test demand will look in a vaccinated US, sentiment may work against HOLX near-term. Further, if we are too prognostic on where we think testing revenue lands the next two quarters, we think Consensus might have to come down a bit". However, he also stated "We're keeping our Buy as we think the business, net of COVID-test sales, is worth between $63 to $66 per share. We think HOLX's risk/reward profile remains favorable and if shares continue to drift lower, we would be buyers on the weakness. A fundamental tenet of our HOLX thesis is that the company will use the cash generated from COVID-test sales to emerge stronger, with improved growth over pre-pandemic. What happens if COVID-test demand doesn't fall off a cliff, or what if it hits a soft landing and COVID-test sales
actually stabilize? Our mid-$60s valuation doesn't assume any COVID sales and this is not a mgmt. team we would bet against."

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

Shares of Hologic closed at $70.78 yesterday.

You May Also Be Interested In

• JPMorgan Comments on TAL International (TAL) Earnings
• Chipotle Mexican Grill (CMG) PT Raised to $3,050 at Stephens
• Avery Dennison (AVY) PT Raised to $230 at Baird