Banc of America Downgrades Cytyc
Cytyc (CYTC ) shares fell after it announced that the Federal Trade Commission will block the acquisition of Digene. The company sees lower than expected EPS of break-even to $0.03 (pro forma).
Banc of America downgraded the stock to market perform from buy. Analyst Kurt Kruger tells S&P MarketScope that the FTC vote is a crushing blow, since the company had counted on DIGE for the next leg of growth as the company's base Pap smear market matures. He sees the company getting about $7 million in 2003 from a marketing agreement with Digene vs. a $135 million former sales forecast from Digene as a unit of Cytyc.
He noted the lukewarm receptivity to the company's ductal levage product. He says it's likely he won't change his rating until he is confident the company has established the next leg of growth beyond 2003. He sees EPS of $0.57 in 2002, and cut his $0.91 2003 estimate to $0.78.