Ahead of the Bell: Parexel stock receives upgrade

Citi analyst upgrades shares of Parexel Intl to 'buy' from 'neutral,' raises price target

Associated Press

A Citi analyst raised his rating on Parexel International Corp. stock, saying its core business in improving and a recent acquisition will help the pharmaceutical research contractor.

The Waltham, Mass., company said Dec. 27 that it spent about $72 million to buy Liquent Inc., which provides software for regulatory submissions and product registration management. The deal price includes debt.

Analyst Garen Sarafian said in a Wednesday morning research note that the deal is favorable to Parexel, even though the stock dropped briefly after the company announced it. The analyst also noted that the company's core performance is improving, which implies that its partnership with the world's largest drugmaker, Pfizer Inc., is on track.

Sarafian also said Parexel is well positioned with 90 percent of its business focused on clinical drug development trials as opposed to pre-clinical research, and the company has about $100 million remaining under a share buyback authorization, which could create a near-term catalyst for the stock.

He raised his rating on Parexel to "buy" from "neutral" and increased a price target on the stock to $36 from $34.

Parexel shares climbed 43 percent to close 2012 trading at $29.59.

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