NEW YORK (GenomeWeb News) – Investment bank Piper Jaffray has raised its price target on Cepheid's stock from $33 to $38, citing a European initiative aimed at C. difficile surveillance that could benefit the molecular diagnostics firm.
Following outbreaks of the hospital-associated infection Clostridium difficile, the European Centre of Disease Prevention and Control has funded a project to enhance laboratory capacity for C. difficile surveillance and detection. While Piper Jaffray analyst William Quirk said in a research note published yesterday that he expects both culture and molecular testing methods to benefit from the initiative, molecular testing is likely to "garner the majority of incremental volume" due to the faster turnaround times.
Among the firms that Quirk said could benefit from the initiative are Cepheid, BioMérieux, Meridian Bioscience, and Bio-Rad Laboratories. He estimated the European C. difficile testing market at $75 million to $100 million. Cepheid sells a molecular test for detection of C. difficile that runs on its GeneXpert platform.
In addition to raising his price target on Cepheid's stock, Quirk also increased his 2012 financial estimates for the firm. He now expects FY 2012 revenues of $315.2 million, compared to a previous estimate of $308.6 million, and earnings per share of $.47, up from a previous estimate of $.43.
For FY 2011, Quirk maintained his estimates for revenues of $255.6 million and EPS of $.12.
In early Friday trade on the Nasdaq, shares of Cepheid were up less than 1 percent at $32.97.