Zacks Investment Research upgraded shares of SurModics Inc. (SRDX) from UNDERPERFORM to NEUTRAL on January 08, 2014, with a target price of $26.00.
SurModics delivered mixed results in the final quarter of fiscal 2013. Though the company reported higher than expected earnings due to cost savings, revenues were below expectations hurt by below par hydrophilic coating sales. The company's earnings guidance for fiscal 2014 is also disappointing. Moreover, the company reported lower than expected revenues as well as earnings in fiscal 2013. Furthermore, we believe that since royalties are a major source of revenues at SurModics, any royalty related setback will affect the top line significantly. However, we believe the current price reflects all the negative news and are reverting to a Neutral recommendation on the stock. Our target price is $26.00 per share.
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