From Standard & Poor's Equity Research
Prudential downgraded Genentech (DNA) to neutral from overweight, noting reduced Avastin market opportunity, weaker top-line growth, and decelerating earnings per share (EPS) growth.
Analyst Ron Ellis anticipates weakness for the shares based on lower-than-expected product sales, particularly for Avastin. He says Avastin sales totaled $423 million in the second quarter vs. his $442 million estimate. He ups his $1.80 2006 EPS estimate to $1.88, cuts his $2.53 2007 EPS estimate to $2.40, and moves his $94 stock price target to $84.