Zacks senior medical products analyst Gregory Aurand, CFA reiterates his Hold rating on C. R. Bard, Inc. (BCR), the medical products company while moving up the six-month target price slightly. The following excerpts explain his position:
'On December 18th, BCR provided 2008 guidance. Newly-acquired products and new product launches should help stimulate the weak surgery group. Management is expecting surgery to grow 4%-9% in 2008, while vascular is expected to grow 14%-16%, urology is expected to grow 8%-10% and oncology's outlook is 13%-15%. All in all, the company expects at least 10% revenue growth and 14% EPS growth in 2008.
'We are increasing our estimates to management's minimum threshold. Operationally, BCR expects 100 basis points in operating margin improvement and a lower tax rate. We are increasing our estimates to management's minimum expectations on higher expected revenues, a better gross margin outlook and a lower guided tax rate.
'Despite new product flow, we believe the company will find it increasingly difficult to generate continued operational improvement to help drive EPS. Stock buybacks could also play an important role. The stock currently trades at roughly 20x our 2008 expected EPS of $4.34. We believe the company should trade in-line with the comparables 1.3x 2008 P/E/G average and 1.3x industry mean, hence our target moves up slightly to $80. Our rating remains Hold.'
Read the full analyst report on BCR.
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