Zacks Investment Research downgraded QIAGEN N.V. (QGEN) to a Zacks Rank #5 (Strong Sell) on May 16.
Why the Downgrade?
Earnings momentum for this molecular diagnostics company has slumped following disappointing first-quarter 2013 results. Shares of QIAGEN have been on a downtrend since April 29, when it reported a weak quarter. Also, the company’s negative earnings growth rate for the ongoing quarter reflects that the stock has more downside left.
QIAGEN reported first-quarter adjusted earnings per share of 20 cents, missing the Zacks Consensus Estimate as well as the year-ago mark of 22 cents each. Despite sales growth of 2% (up 3% at constant exchange rate or CER), net sales of $303.6 million in the last quarter failed to meet the Zacks Consensus Estimate of $306 million.
Based on the dismal performance, QIAGEN revised its 2013 revenues outlook. The company expects net sales to rise by 5% at CER compared with earlier guidance of 5%–6%. QIAGEN also reduced its 2013 EPS guidance to $1.13 from earlier provided range of $1.16−$1.18. The current Zacks Consensus Estimate of $1.04 remains outside the guided range reflecting a negative bias for the ongoing year.
Estimate revision trend reflects overly bearish sentiments towards QIAGEN’s earnings for the ongoing and next year. Over the last 60 days, most of the estimates were revised downward with no upward revision for 2013 and 2014. The Zacks Consensus Estimate for 2013 decreased 6.3% to $1.04 per share. For 2014, the Zacks Consensus Estimate declined 4.1% to $1.18 per share over the last 60 days.
Other Stocks to Consider
While QIAGEN is currently out of favor, peer Myriad Genetics Inc. (MYGN) carries a favorable Zacks Rank #2 (Buy). Other players such as Alkermes plc (ALKS) and Illumina Inc. (ILMN), holding a Zacks Rank #2, are also worth considering.
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