NEW YORK (GenomeWeb) – Investment bank Mizuho Securities has upgraded shares of Fluidigm from Neutral to Buy citing improved end markets and the expected effects from the firm's recent acquisition of DVS Sciences.
Mizuho analyst Peter Lawson said in a research note published Tuesday that recent first quarter surveys, including one conducted in collaboration with GenomeWeb, showed that "sentiment improved across all end markets —genomics, pharma, academic and diagnostic — and especially for genomics." He added that expectations for funding and spending in the genomics market has improved, and "sequencing looks to be robust — all positives for Fluidigm."
Lawson also noted Fluidigm's recent acquisition of mass cytometry firm DVS for about $207.5 million, which provided the firm with a foothold in the high-end flow cytometry and single-cell proteomics markets. He said DVS' technology is complementary to Fluidigm's single-cell genomics business, and the business could provide up to $30 million in revenue to Fluidigm in 2014.
In addition, the recent pullback in biotech stocks in general has presented an "attractive entry point," Lawson wrote. He noted that Fluidigm's stock has fallen around 21 percent since hitting a high of $49 last month, while the S&P has only declined 1 percent over that time period.
Lawson raised his price target on Fluidigm's stock to $50 from $43, which is based on a 2015 revenue estimate of $156 million.
"We believe Fluidigm's premium to peers is justified based on its growth profile, margin potential, and leading position in a high-growth area of genomics," he said.
The upgrade from Mizuho follows a similar upgrade earlier this month by Leerink Swann, which raised its rating on Fluidigm's stock to Outperform from Market Perform while maintaining a $52 price target.