Cantor Fitzgerald says buy Catamaran aggressively on Q1 selloff

Cantor Fitzgerald analyst Tom Liston says the market is overreacting to Catamaran’s (Catamaran Stock Quote, Chart, News: TSX:CCT) Q1 numbers.

This morning, the company released its Q1, 2013 results. Catamaran earned $56.78-million on revenue of to $3.2-billion, an 88% bump over the $1.7-billion the company posted in the first quarter of 2012.

While the stock was down immediately after the release, Catamaran CEO Mark Thierer said he was pleased with the numbers.

“Catamaran is off to a great start in 2013, and we expect to continue to deliver strong results for the remainder of the year and continued growth going forward,” he said.

Cantor Fitzgerald analyst Tom Liston says Catamaran shares are overreacting to a slight revenue and EBITDA miss. Noting that the company did beat the street’s expectation on EPS, he says there are several positive catalysts for the company over the next few months, and he would be an aggressive buyer of the stock on the selloff that followed the Q1 news. In a research update to clients this morning, Liston maintained his BUY recommendation and $65 one-year target on Catamaran.

In Febraury, shares of Catamaran were hit after speculation that it would not be given the chance to buy Cigna’s pharmacy plans, because that company would keep its PBM business in house rather than sell it. Liston says that he views the fact that there was no further disclosure on the Cigna contract as positive, and now believes there is “an overwhelming probability” that the contract will stay with Catamaran for at least one more year.

Shares of CCT on the TSX closed today down 7.2% to $53.37.

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