Goldman Sachs has increased its price target on Volcano Corp. (VOLC) shares to $28 from $25 on higher sales forecast and EV/sales multiple. The brokerage has also increased its EPS and revenue estimate for 2012 and 2013. However, analyst David Roman maintained Neutral rating.
The brokerage sees Volcano as the primary gainer of share on the IVUS side at the cost of Boston Scientific based on fourth quarter results of Boston Scientific. This apart, the company’s current IVUS client base is also attractive across selling opportunity.
Goldman Sachs sees present consensus estimates as appropriately capturing Volcano’s fundamental outlook and that its 2012 revenue and EPS projection are 0.3 percent and 2.5 percent lower than Street estimate. The brokerage’s revenue guidance indicated 15.1 percent year-on-year upside, while Street projects 15.6 percent and company aims at 15 – 17 percent.
The brokerage views 2012 outlook as balanced and maintained Neutral rating ahead of the company’s fourth quarter earnings.
Goldman Sachs increased its EPS estimate for 2012 to $0.39 from $0.24 and for 2012 to $0.51 from $0.49. Similarly, the brokerage raised revenue projection to $396.1 million for 2012 from $380.1 million and for 2013 to $443.9 million from $430.0 million.
The brokerage lists key risks as share gains, strategic activity, litigation and fluctuations in PCI growth.