NEW YORK (TheStreet) -- Shares of St. Jude Medical (STJ) are increasing 0.35% to $73.93 after analysts at Evercore ISI initiated coverage of the medical technology company with a "hold" rating and a price target of $78.50.
The firm's price target indicates a potential upside of 6.53% from the company's current price.
The action comes after the company released its first quarter results last month. It reported revenue of $1.35 billion, or 93 cents earnings per share, compared to revenue of $1.36 billion, or 96 earnings per share in the same period the previous year.
While revenue was slightly down 1.3% from the same period last year, the company beat Thomson Reuters consensus estimate of 91 cents per share on revenue of $1.31 billion.
TheStreet Ratings team rates ST JUDE MEDICAL INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate ST JUDE MEDICAL INC (STJ) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, notable return on equity, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ST JUDE MEDICAL INC has improved earnings per share by 5.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ST JUDE MEDICAL INC increased its bottom line by earning $3.45 versus $2.50 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $3.45).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ST JUDE MEDICAL INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that STJ's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: STJ Ratings Report