Hospira Upgraded to Strong Buy on Orchid Facility Buy - Analyst Blog

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On Jul 12, Zacks Investment Research upgraded Hospira Inc. ( HSP ) to a Zacks #1 Rank (Strong Buy).

Why the Upgrade?

The upgrade came on the heels of Hospira's recently completed Orchid facility buy. Earlier in the month, the company announced that it has completed the acquisition of the penem and penicillin active pharmaceutical ingredient manufacturing unit and an associated research and development facility from India-based Orchid Chemicals & Pharmaceuticals Ltd. for around $218 million. The deal was first announced in 2012. (Read more: HOSPIRA COMPLETES ORCHID FACILITY BUY ).


Moreover, Hospira delivered impressive first quarter 2014 earnings of 60 cents per share, beating the Zacks Consensus Estimate by 11 cents and year-ago earnings by 15.4%. The first quarter earnings beat was aided by higher revenues.

Hospira's Specialty Injectable Pharmaceuticals segment has over the past several quarters contributed the majority of revenues. The segment performed well in the first quarter too. Favorable pricing as well as volume led to the strong segmental performance. Expansion in volume was driven by continued supply recovery along with competitor supply issues in the U.S. Segmental sales climbed 9.9% (up 11.1% at constant currency) to $716.3 million.

The Zacks Consensus Estimate for 2014 is currently pegged at $2.21. It is on the higher end of the company's guidance range of $2.00 to $2.25 per share.

Other Stocks to Consider

Some other medical stocks worth considering include Biogen Idec Inc. ( BIIB ), Actelion ( ALIOF ) and The Medicines Company ( MDCO ). All three stocks sport a Zacks Rank #1.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Stocks

Referenced Stocks: HSP , MDCO , ALIOF , BIIB

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