Qiagen N.V. (QGEN) produces and distributes biotechnology products and services primarily for separating and purifying nucleic acids (DNA/RNA). The company, through its subsidiaries in Europe, Asia, Australia, Canada and the U.S., operates in the life sciences industry with a portfolio of more than 500 products and automated solutions.
Though the molecular diagnostic and research market offer enormous growth, the company faces stiff competition. We would like to see their research spending stabilize before we recommend the shares.
We maintain our Hold rating for Qiagen with a target price of $24 per share based on strong financial performance in the third quarter of the fiscal 2007. Both 2005 and 2006 were eventful years with the company entering into several acquisitions and partnerships which should help drive growth in 2008 and beyond.
We are optimistic on a number of new research products and potential breakthrough procedures for fractionation of proteins using Qiagenâs new product offerings. We would, however, like to see more home-brew protocols begin to use Qiagenâs products and trends in research spending stabilize before we become bullish on the company.
Our $24 price target corresponds to 38x our projected fiscal 2009 EPS of $0.73, discounted back at 15 per cent for one year. We believe that Qiagen shares offer only limited upside at the current price.
Varun Parwal contributed to this report.
Read the full analyst report on QGEN.
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