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Haemonetics Rides on Strong Plasma and Global Expansion

Zacks Equity Research

On Aug 26, we issued an updated research report on Haemonetics Corporation HAE. The company has been witnessing strong growth in Plasma and Hemostasis Management units for quite some time now. The stock currently sports a Zacks Rank #2 (Buy).

Shares of this leading provider of hematology products and solutions have outperformed its  industry over the past three months. The stock has surged 32.5% compared with the industry's 10% rise.

Haemonetics exited the first quarter of 2020 on a positive note with better-than-expected earnings and revenues. We are impressed with the robust performance of Plasma as well as Hemostasis Management franchise.

Haemonetics Corporation Price

Haemonetics Corporation Price

Haemonetics Corporation price | Haemonetics Corporation Quote

Per the company, benefits from complexity reduction and investments along with strength in market demand and success from early launches helped the company pull off an impressive performance. Continued momentum in new business generation and geographical expansion contributed to the results. The U.S launch of TEG 6s has also driven the share price. The ongoing momentum has encouraged the company to project strong organic revenue growth for fiscal 2020.

Haemonetics has been witnessing a sturdy uptick in Plasma franchise for quite some time. In the fiscal first quarter, Plasma grew 16% on a 17% increase in North America, driven by price, volume and mix. The company has completed more than 5 million YES procedures, resulting in more than 115,000 incremental leaders of plasma collected.

The company is progressing well with the development and launch of NexSys PCS plasmapheresis system. To date, Haemonetics converted roughly 20% of its North American install fleet to the NexSys PCS device.

Under Hospital business, Hemostasis Management benefited from progress in the last few quarters. Also, TEG emerged as the global leader in Hemostasis Management, led by solid disposable growth and amplified TEG success capital sales.

However, we are disappointed with the fact that despite generating encouraging growth at the Plasma and Hospitals segments, Haemonetics' sluggish Blood Center business moderated overall growth in the reporting cycle.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Medtronic MDT, Baxter BAX and Amedisys AMED, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s long-term earnings growth rate is expected at 7.13%.

Baxter’s long-term earnings growth rate is projected at 12.8%.

Amedisys’ long-term earnings growth rate is expected to be 12.75%.

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