Why Alere (ALR) Stock Is Jumping Today

Alere (ALR) stock is rising on Friday morning after the company said it expects to restate financial results and was upgraded to ‘buy’ at Canaccord Genuity.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of Alere (ALR) are spiking 7.66% to $42.47 on heavy trading volume Friday morning as the company said it expects to restate financial results and was upgraded to "buy" from "hold" at Canaccord Genuity.

The Waltham, MA-based diagnostic testing company said it will file its 2015 annual report "as soon as practicable."

Alere was subpoenaed by the Department of Justice due to its sales practices and has delayed filing its annual report as it analyzes revenue from Africa and China for 2013, 2014 and 2015, Reuters noted.

Additionally, the company now forecasts 2015 revenue of $2.45 billion, lower than its prior view of $2.48 billion to $2.5 billion.

Earlier this year, Alere agreed to be acquired by Abbott Laboratories (ABT) for $5.8 billion.

Canaccord raised its rating on Alere stock following the "positive" update.

"After digesting the press release and speaking to Alere, we believe our concerns about the deal not closing at the deal price with Abbott have been put to bed," Canaccord wrote in an analyst note.

While Alere acknowledged incorrect revenue recognition on certain transactions, primarily in Africa and China, the company does not expect that any of the prior period misstatements to be material, individually or in aggregate, the firm noted.

Canaccord also upped its price target on the stock to $56 from $44.

About 1.73 million of Alere's shares changed hands so far this morning vs. its average 30-day volume of 680,875 shares per day.

Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on Alere stock.

The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and expanding profit margins.

But the team also finds weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: ALR

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