In a research report to clients today, Cooper maintained his “Buy” rating and one-year price target of $1.40 on Hamilton Thorne, implying a return of 89 per cent at the time of publication.
Cooper notes that the trend towards consolidation in the industry continues, pointing to the $125-million acquisition of IVF leader LifeGlobal Group by Cooper Companies earlier this week. That move followed multiple acquisitions by Vitrolife and FujiFilm’s pickup of Irvine Scientific.
The analyst says Hamilton Thorne is currently in the position of being the hunter and the hunted. The company’s own acquisition story (it acquired Gynemed in April, 2017) plays against an industry backdrop that features a pool of mid-sized IVF players that might be interested in the “major discount” that HTL currenrtly trades at.
“Based on industry activity, as well as Hamilton Thorne’s history of accretive acquisitions, we believe HTL shareholders are in a good situation and are poised to win either way if HTL is The
Hunter or The Hunted,” Cooper says.
Cooper thinks Hamilton Thorne will generate Adjusted EBITDA of $4.5-million on revenue of $21.2-million in fiscal 2017. He expects those numbers will improve to EBITDA of $5.6-million on a topline of $27.0-million the following year.
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