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Haemonetics Rides High on Plasma, Blood Center Remains Weak


On Apr 10, we issued an updated research report on Haemonetics Corporation HAE. The company has been gaining on continued momentum in new business generation and geographical expansion. The stock carries a Zacks Rank #3 (Hold).

This leading provider of hematology products and solutions has outperformed the industry over the last three months. The stock has rallied 14.2% versus the industry’s 2.7% decline.

Haemonetics exited third-quarter fiscal 2018 on a promising note with earnings and revenues beating the Zacks Consensus Estimate. Continued momentum in new business formation and expanding geographies has also helped the company deliver strong results in the quarter. Moreover, the gross and operating margin growth buoys optimism among investors about the stock.

Additionally, we are upbeat about Haemonetics’ flourish in the Plasma franchise. For solid end-market demand for plasma-derived biopharmaceuticals continues to drive growth. Haemonetics is also confident about maintaining progress in the commercial Plasma collection business.

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

On the flip side, Haemonetics operates in a fiercely competitive environment with respect to 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. Also, management doesn’t expect any quick recovery in Blood Center’s outcome, which further adds to our concerns.

Key Picks

A few better-ranked stocks in the broader medical sector are athenahealth, Inc. ATHN, Bio-Rad Laboratories, Inc. BIO and Centene Corporation CNC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

athenahealth has an expected long-term growth rate of 17.7% and the current-year metric is pegged at 52.8%.

Bio-Rad has an expected long-term growth rate of 20% and the current year’s stands at 42.9%.

Centene has an expected long-term growth rate of 14.4% and the same for 2018 is projected at 43.1%.

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