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Roth upgrades RTI Biologics to buy

August 1, 2012 by · Leave a Comment 

Roth Capital Partners has upgraded RTI Biologics (NASDAQ:RTIX) to “buy” from “neutral,” maintaining its price target of $4.50, after the company reported better than expected second quarter results and increased its 2012 guidance.

Matt Dolan

“This has become a consistent pattern for management since early 2011, and we believe the company’s outlook remains conservative,” writes analyst Matt Dolan. At about 12 times estimated 2013 EPS, “we see minimal downside, especially if the company can improve growth with new products next year,” he added.

RTI Biologics, together with its subsidiaries, prepares human donated tissue and bovine tissue for transplantation worldwide.

Regarding higher guidance, Mr. Dolan said management is prudently maintaining a very conservative approach to provide guidance, “leaving more opportunities for upside in the back half of the year.”

Assuming the existing business continues to perform with its current metrics, he said the fate of the RTI story will largely be determined by its ability to accelerate growth and continue to improve its margins. “In our opinion, the company’s second quarter update demonstrates progress toward these two initiatives,” he added.

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