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Investment Banks Upgrade Fluidigm, Hologic

NEW YORK(GenomeWeb) – Cowen & Co. today upgraded shares of Fluidigm to Outperform, noting the company's strong base business and improvement in its DVS business. 

Also, William Blair upgraded Hologic shares to Outperform, citing changes to the firm's management. 

Cowen analyst Douglas Schenkel upgraded Fluidigm's shares from a previous Market Perform rating and increased the price target on the stock to $40 from $32. 

Fluidigm last week announced preliminary fourth quarter revenues of $33.4 million, including organic revenue of $25.2 million. In a note, Schenkel estimated that core revenues for the quarter were in line with expectations — and may have beat his slightly below-consensus estimates — while DVS revenues beat his estimates by about $600,000. 

For full-year 2014, he estimated that Fluidigm's organic revenue grew 36 percent as core revenues of $95 million beat his expectation of $85 million. The C1 installed base grew to more than 275 instruments from about 130, Schenkel estimated, and C1 consumables revenues "likely quadrupled."

Total C1 revenues grew about 85 percent year over year, he added "and we believe placement momentum continued to build into year end."

Meanwhile, he calculated the installed base of BioMark instruments grew 15 percent year over year in 2014, while total BioMark revenues ramped up 25 percent.

Schenkel also noted improvement in Fluidigm's DVS business. The acquisition of DVS in January 2014 was the "key driver to Fluidigm share underperformance" during the year, he said, and while expectations have been tempered from the time of the deal, he saw signs of momentum in the business as 2014 ended. DVS revenues grew sequentially in the fourth quarter and he believes that CyTOF placements were slightly ahead of forecasts.  

"Based on our previous analysis and recent momentum, we believe it is reasonable to expect the CyTOF installed base to grow from approximately 95 to more than 140 in 2015," Schenkel said. He added that he expects DVS revenues can grow to between $35 million and $40 million during the year and contribute $15 million to $20 million in incremental revenue in 2015.

In afternoon trading on the Nasdaq, Fluidigm shares were up almost 10 percent at $37.17. 

Separately, William Blair today upgraded Hologic's shares to Outperform from Market Perform. Analyst Brian Weinstein noted "a transformation" in Hologic's culture and said that "management talent has been upgraded, leadership and accountability now exists where it did not before, end markets may be stabilizing, and communication with [investors] is improving." 

Hologic last week said that it anticipates a 7 percent increase in its fiscal first quarter revenues to $653 million. Weinstein noted an estimated 7 percent increase in diagnostics revenues on a currency-neutral basis versus his prior estimate of 1 percent growth, and added that the company has "significant opportunities" internationally, which currently accounts for about 25 percent of Hologic's business.

Hologic shares on the Nasdaq were up a fraction of 1 percent today

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