Merrill Lowers Invitrogen Rating
Invitrogen (IVGN ) posted $0.38 fourth quarter EPS (pro forma). The company declined to update guidance beyond 1the first quarter. Merrill Lynch downgrades its investment ratings on the stock to near-term neutral and long-term buy from strong buy.
Analyst Paul Kelly says the company ties sharply reduced growth prospects for at least the 2002 first quarter to company-specific issues and reduced demand from drug discovery concerns, which account for 40% of Invitrogen's customer base. Kelly says there is major, unexpected weakness in the company's Molecular Biology division, which represents 70% of revenue. He sees flat to down near term prospects, and an unclear path to return to growth. Kelly cut his $0.52 first quarter cash EPS estimate to $0.43 and his $2.05 forecast for all of 2002 to $1.69.