Covidien's shares rise
Wall Street held a positive outlook for Covidien Ltd. today following the medical device maker and diversified health care company's guidance for sales growth in 2009.
Following its annual investor conference yesterday, a company that is operated out of Mansfield said it expects sales to rise between 5 percent to 8 percent from 2008 at current foreign exchange rates, or 6 percent to 9 percent on an operational basis, excluding foreign exchange rates. Also, it expects sales of the painkiller Oxycodone Hydrochloride extended-release tablets to add at least 15 cents per share to fiscal 2009 earnings.
Shares rose $1.11, or 2 percent, to $56.20 in mid-day trading on the New York Stock Exchange.
The 2009 fiscal year begins at the end of September. The company split from former parent Tyco International Inc. last year.
Analysts polled by Thomson Financial expect fiscal 2009 profit of $3 per share on revenue of $10.57 billion.
"Covidien's second investor day was considerably more upbeat than last year's and even though we expect the consensus view to move up to our $3.09 fiscal 2009 earnings per share estimate, we think there is still room for further upside," said Citi Investment Research analyst Matthew Dodds in a note to investors.
He reaffirmed a "Buy" rating with a $65 price target, saying the company's surgical and pharmaceutical businesses are both poised for success in 2009.
Meanwhile, Deutsche Bank analyst Tao Levy reaffirmed a "Buy" rating with a $63 price target, saying the company is poised to deliver double-digit earnings per share growth over the next several years, with medical devices being the primary driver in fiscal 2009.
"Bottom line is that the current health and outlook of Covidien's businesses remain robust," Levy said.
BMO Capital Markets analyst Joanne Wuensch upgraded Covidien to "Outperform" from "Market Perform," saying the company's positive performance since its split from Tyco is likely to continue. (AP)
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