Canaccord cuts OraSure to hold; PT down to $10 from $16

Canaccord Genuity downgraded OraSure Technologies (NASDAQ:OSUR) to “hold” from “buy” and dropped its price target to $10 from $16, citing disappointment of underlying trends in direct-to-consumer (DTC) genetic testing. The stock closed at $9.75 on May 8.

Analyst Mark Massaro writes that the large U.S. market seems to be finding a “new normal” of growth and interest, and unfortunately, “we lack conviction as to when trends will revert back to meaningful growth.”

He said underpinning Canaccord’s earlier buy-rated thesis was that U.S.-based DTC testing would experience double-digit growth in each of the next several years or longer. “We no longer have this conviction, and thus, we … removed OraSure as one of our top picks.”

Mr. Massaro said OraSure could potentially “look attractive to value investors at present levels (about 2.5 times our 2019 revenue estimate), or possibly even to a larger company looking to do a tuck-in.”


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