Dasa Declines to Three-Week Low After JPMorgan Cuts Rating

Brazilian medical-diagnostics firm Diagnosticos da America SA (DASA3) fell to the lowest price in three weeks after JPMorgan Chase & Co. cut its recommendation to “underweight” from “overweight” as sales growth slows.

Dasa, as the company is known, lost 2.4 percent to 14.89 reais at 6:15 p.m. in Sao Paulo. That’s the lowest close since Sept. 23 and extends its slump this year to 34 percent. The benchmark Bovespa index declined 2 percent today and is down 22 percent this year.

“Sales growth has decelerated in all segments, and in the outpatient business it is underperforming its largest competitor, Fleury,” Andrea Teixeira, an analyst at JPMorgan in New York, said in a note to clients today. She further cited “uncertainties regarding the company’s ability to accelerate growth and improve margins.”

Fleury SA (FLRY3) fell 0.5 percent to 21.10 reais today. JPMorgan reiterated its “overweight” rating on the stock.

Dasa may also be affected by delays in integrating its 2010 acquisition of MD1 Diagnosticos SA after Brazil’s antitrust regulator Cade indicated that it may block the transaction, Teixeira wrote.

Cade’s general attorney, Gilvandro Vasconcelos Coelho de Araujo, recommended ordering Dasa to keep its administration separate from MD1 Diagnosticos SA on concern the combined company would have too much market share, an agency official said in July.

Dasa’s second-quarter net sales increased 9.7 percent from a year earlier to 541.2 million reais ($309 million), according to an Aug. 15 regulatory filing. That compares to annual growth of 13 percent in the previous quarter, a May 23 filing shows.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulous@bloomberg.net