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Haemonetics (HAE) Banks on Plasma Franchise, Competition Rife


On Feb 9, we issued an updated research report on Haemonetics Corporation HAE. The stock carries a Zacks Rank #2 (Buy).

This leading provider of hematology products and solutions has been trading above the industry over the last six months. The stock has rallied 61.5% compared with the industry’s 3.5% gain. The stock has also outperformed the S&P 500’s 7.4% gain.

Haemonetics exited third-quarter fiscal 2018 on a promising note, with earnings and revenues beating the Zacks Consensus Estimate. Continued momentum in new business generation and geographical expansion has helped the company deliver strong results in the quarter. The expansion in gross and operating margin buoys optimism.

We are upbeat about Haemonetics’ growth in the Plasma franchise. Strong end-market demand for plasma-derived biopharmaceuticals continues to drive growth. Haemonetics is also confident about maintaining growth in the commercial Plasma collection business.

Further, the raised fiscal 2018 adjusted earnings guidance is encouraging. The company’s strong cash position also boosts investors’ confidence.

On the flip side, Haemonetics operates in a very competitive environment, for manual and automated systems, which includes the likes of MAK Systems.

Moreover, the company has been witnessing sluggish revenue growth at the Blood Center franchise, significantly affecting its results over the past few quarters. Management also doesn’t expect any early recovery in Blood Center’s outcome, which adds to our concerns.

Other Key Picks

Some other top-ranked stocks in the broader medical sector are PerkinElmer PKI, Bio-Rad Laboratories BIO and Becton, Dickinson and Company BDX.

Bio-Rad Laboratories has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company has a long-term expected earnings growth rate of 25%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

Becton, Dickinson and Company has a Zacks Rank #2. The company has a long-term expected earnings growth rate of 13.3%.

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