Analyst cuts Hologic rating, expecting slow growth

Analyst downgrades Hologic, forecasting slow sales of products other than mammogram systems

Associated Press

NEW YORK (AP) -- A Raymond James analyst downgraded shares of Hologic on Wednesday, saying he expects slow revenue growth for the medical device company.

THE OPINION: Analyst Jayson Bedford lowered his rating to "Market Perform" from "Outperform." Bedford said he expects strong sales of the company's Selenia digital mammography system, but said Hologic's overall revenue growth is being held back by weaker growth from cervical cancer screening products, bone imaging equipment, and its NovaSure endometrial ablation system.

Hologic makes products used to detect breast and cervical cancer. Its Selenia Dimensions system generates two-dimensional and three-dimensional images of the breast, and it captures images from multiple angles.

"While we believe that 3-D mammography could be one of the most attractive product cycles in med tech, there are still many anchors on the rest of the business, which will weigh on growth over the next few years," Bedford said. The analyst said he expects growth in the low-single digits at best over the next few years.

Hologic Inc. reported $1.38 per share in adjusted net income in its latest fiscal year and said its sales grew to $2 billion. In August the company reduced its fiscal 2013 net income and revenue forecasts, saying it will earn $1.46 to $1.47 per share excluding special items, while revenue will be between $2.51 billion and $2.52 billion.

The company said it expects slower growth in sales of Selenia systems and its Panther assay system.

Analysts currently expect Hologic to report adjusted net income of $1.48 per share on $2.51 billion in revenue in fiscal 2013, which ends in late September.

THE STOCK: Shares of Hologic declined 3 cents to $20.50 in afternoon trading. The stock has traded between $18.46 and $23.96 in 2013.

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