On Sep 17, Zacks Investment Research downgraded
) to a Zacks Rank #4 (Sell) from Zacks Rank #3 (Hold).
Why the Downgrade?
CONMED witnessed downward estimate revisions following
disappointing second-quarter 2013 results. The medical
technologies and surgical devices company also provided a lower
guidance for 2013.
On July 26, CONMED reported second-quarter adjusted earnings per
share that remained flat year-over-year at 43 cents and missed
the Zacks Consensus Estimate by 2 cents. Revenues dropped 1.7%
(2.3% at constant exchange rate) to $193.0 million, reflecting a
soft healthcare utilization and spending environment in the
global economy. Revenues missed the Zacks Consensus Estimate by
Ongoing dismal macroeconomic conditions along with poor capital
spending and sluggish volume/procedure growth are major causes of
worry. Moreover, the company operates in a highly-competitive
orthopedic surgery market against larger and more
technically-competent companies. However, the only positive
factor in the second quarter results was the company's higher
margins driven by leveraged operating efficiency and cost-saving
initiatives undertaken by management.
CONMED lowered its guidance for 2013, owing to the difficult
austerity measures persisting in Europe as well as flattish
healthcare utilization rate in the U.S. The company narrowed its
previous earnings guidance of $1.80-$1.90 per share to
$1.80-$1.85 per share. The guidance assumes negative impact of
the medical device excise tax and foreign exchange headwinds.
Similarly, management also lowered its estimated 2013 sales
forecast to $770 million-$775 million from the earlier prediction
of $770 million-$780 million.
The Zacks Consensus Estimate for 2013 inched up 0.6% to $1.82 per
share over the last 30 days. However, for 2014, the Zacks
Consensus Estimate decreased by roughly 1% to $2.05 per share
over the same period.
Other Stocks to Consider
Not all medical stocks are performing as poorly as CONMED. Other
well-performing medical stocks that warrant a look are
Quintiles Transnational Holdings Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AFFYMETRIX INC (AFFX): Free Stock Analysis
ALERE INC (ALR): Free Stock Analysis Report
CONMED CORP (CNMD): Free Stock Analysis
QUINTILES TRANS (Q): Free Stock Analysis
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