Morgan Stanley Upgrades Genzyme to Strong Buy
Morgan Stanley raised its rating on Genzyme (GENZ ), a health diagostics products company, to strong buy from outperform. On Monday, the Food and Drug Administration requested additional data tied to the company's application to market Fabrazyme.
Analyst Caroline Copithorne said she upgraded the stock on improving fundamentals, the recent pullback in the stock price and valuation. She said that the FDA's response letter on the company's biologics license application for Fabrazyme clarifies additional steps needed for approval in U.S. and eliminates potential uncertainty.
However, she cut her 2002 earnings per share estimate to $1.52 from $1.61 and her 2003 estimate to $2.12 from $2.21 to reflect the delay in Fabrazyme approval. She sees $1.22 earnings per share in 2001. She reduced her price target on the stock to $72 from $76.