CFN CareFusion target raised to $37 from $33 at Stifel Nicolaus
08-Feb-13 08:36 ET
CareFusion target raised to $37 from $33 at Stifel Nicolaus
Stifel Nicolaus raises their CFN tgt to $37 from $33 and notes that despite a shortfall in Dispensing (Pyxis) sales, CFN reported a solid quarter. Looking ahead to F2H13, the year seems poised to finish on a strong note. But, in F3Q13, they project a y/y sales and EPS decline, due to the shifting of dispensing revenues into FY2014 and off unusually difficult y/y Medical Systems comps. To them, all this sets the stage for what could be accelerated top and bottom line growth in FY2014, helped by a rebound in Dispensing, less negative than previously expected Infusion pump pricing, sustained growth in Procedural Solutions and continued efficiency measures.
Some of the dispensing revenue is shifting from Pyxis to Omnicell, not to next year.
Omnicell is for the most part a pure med management/dispensing play, all you have to do is look at their accelerating sales growth and back log to see where the revenue is going.
All of the financial improvement in this stock has been through cash management being used to improve the companies financial position since the spin off from Cardinal in 2009.They have been unable to generate sales increases despite continually buying new businesses that help hide the sales drop in their existing businesses.
The stock could run a little because the market is lifting most boats and there are still some more changes that could drop to the bottom line, but if they cannot grow the businesses top line sales the stock is destined to reverse its direction