Deutsche Bank ups tar­gets on biotech and health care

Financial Mirror (Cyprus) - - FRONT PAGE -

With the sec­ond-quar­ter earn­ings com­ing fast and fu­ri­ous, and with an­other big week in front of in­vestors, many of the top Wall Street firms are get­ting the chance to sift through the num­bers and re­sults. They are also be­gin­ning to be able to re­ex­am­ine not only their the­ses, but their price tar­gets as well.

New re­search re­ports from the biotech, health care and med­i­cal de­vice teams at Deutsche Bank raise price tar­gets on three top names to buy and in­clude up­dates on two oth­ers. In­vestors look­ing to add new stocks to their portfolios in these ar­eas may want to con­sider these com­pa­nies as very solid ideas.

Am­gen Inc.

(NAS­DAQ: AMGN) is one of the mega-cap biotechs that many on Wall Street think will hand­ily beat this year’s earn­ings es­ti­mates. Over the past five years, the com­pany has had free cash flow of at least $3 bln a year. Over the past decade, the com­pany has grown its af­ter-tax profit by 14% com­pounded an­nu­ally. The com­pany re­leased very pos­i­tive phase 3 re­sults last week for AMG416, a new treat­ment for sec­ondary hy­per­parathy­roidism. With the patent on Sen­si­par ex­pir­ing in 2017, the com­pany looks to ex­tend the valu­able fran­chise.

In­vestors are paid a 2% from the biotech gi­ant. Deutsche Bank raised its price tar­get from $144 to $149. The Thom­son/First Call con­sen­sus tar­get is posted at $132.18. The stock ended trad­ing on Fri­day at $118.30 a share.

Athenahealth

Inc.

(NAS­DAQ: ATHN) re­ported very strong earn­ings, but some of its cau­tious com­men­tary caught an­a­lysts off guard. The Deutsche Bank team thinks that, de­spite the earn­ings beat, in­vestors may fo­cus on the com­men­tary and not the strong fun­da­men­tals. The rev­enue and strong gross mar­gins drove earn­ings of $0.32 per share, ver­sus their es­ti­mate of $0.20 and the con­sen­sus of $0.22. Bet­ter util­i­sa­tion, faster col­lec­tions and pric­ing drove the top line and gross mar­gins.

The Deutsche Bank price tar­get of $182 is way above the con­sen­sus num­ber of $159. Athenahealth closed on Fri­day at $124.60, which was down more than 2% on the day.

(NYSE: EXAM) is a leading provider of in­de­pen­dent med­i­cal ex­ams (IMEs), peer re­views, bill re­views, Medi­care com­pli­ance and other re­lated ser­vices. The com­pany’s cur­rent the­sis is to trans­form the IME mar­ket through su­pe­rior IME data se­cu­rity and a na­tional foot­print, which the Deutsche Bank an­a­lysts feel is play­ing out al­most ex­actly they en­vi­sioned.

Deutsche Bank raised its price tar­get on Ex­am­Works’ stock from $38 to $40. The con­sen­sus tar­get is set at $39.25. Shares closed on Fri­day at $31.55.

(NYSE: SYK) has con­tin­ued to ex­pand its busi­ness lines over the past year through ac­qui­si­tions. Last year, Stryker com­pleted its ac­qui­si­tion of MAKO Sur­gi­cal to get hold of the lat­ter’s ad­vanced ro­botic arm tech­nol­ogy, known as Ro­botic Arm In­ter­ac­tive Or­tho­pe­dic Sys­tem. The ac­qui­si­tion is help­ing the com­pany gain a

Ex­am­Works Group Inc.

Stryker

Corp.

com­pet­i­tive edge in the hip-and-knee re­place­ment mar­ket. Stryker good earn­ings that were in-line with es­ti­mates and of­fered up some mixed guid­ance for the rest of the year. The com­pany had some pos­i­tive com­ments on its 2015 tax sta­tus.

In­vestors are paid a 1.4% div­i­dend. The Deutsche Bank price tar­get for this top med­i­cal de­vice stock is $90, and the con­sen­sus tar­get is at $88.41. Stryker closed on Fri­day at $82.16 a share.

Unit­edHealth Group Inc.

(NYSE: UNH) of­fers the full spec­trum of health ben­e­fit pro­grammes for in­di­vid­u­als, em­ploy­ers and Medi­care and Med­i­caid ben­e­fi­cia­ries, and it con­tracts di­rectly with more than 800,000 physi­cians and care pro­fes­sion­als, as well as 6,000 hos­pi­tals and other care fa­cil­i­ties. The com­pany posted solid sec­ond-quar­ter num­bers and de­liv­ered im­proved ex­e­cu­tion on op­er­at­ing ex­penses, which if main­tained should cre­ate a higher earn­ings-per-share run-rate through 2015.

In­vestors are paid a 1.8% div­i­dend. The Deutsche Bank price tar­get is $90, and the con­sen­sus tar­get is $91.14. The stock closed on Fri­day at $85.52. Deutsche Bank has a nice mix of stocks that cover a lot of health care sec­tor ground. Go­ing for­ward, with an ag­ing pop­u­la­tion, these names should con­tinue to do well in a long-term growth port­fo­lio.

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