QIAGEN: Delayed ramp-up in profitabilityNEUTRAL, Fair Value EUR22 (+4%)
Q1 sales came slightly above CS while significant cost to reallocate the production of QuantiFERON TB test as well as S&M expenses impacted Operating income which came 10% below expectations. However EPS is in line with expectations at USD0.19. We flagged the risk on overly-optimistic consensus which should put the share price under pressure at opening. Indeed, while Q2 sales guidance is in line with expectations, EPS is expected at USD0.21 i.e. 19% below consensus. This may provide entry points as maintained FY2016 guidance translates management’s confidence in ramping-up profitability and should be accompanied by a USD100m share repurchase programme.
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