Barclays on U.S. Diagnostics: Q1 2011 Preview

Barclays on U.S. Diagnostics: Q1 2011 Preview

Barclays analyst says, "We discuss key themes and expectations for March-quarter earnings for our U.S...Diagnostics coverage. Our Overweight names include Gen-Probe (Nasdaq: GPRO),Qiagen (Nasdaq: QGEN) and Sequenom (Nasdaq: SQNM). Macro environment stable, comps should ease as the quarters progress: 2010 saw double digit declines in patient testing volumes as persistent high unemployment rates and economic uncertainty drove uninsured patients out of the system and made insured patients more cautious on co-payments for discretionary medical tests and procedures. While companies pointed to stabilization in clinical markets on 2011 outlook calls, investor expectations have been contained by management teams' reluctance to call for a pick-up in volumes even as the unemployment rate recedes and tough comps from H1N1 roll off. We are therefore cautiously optimistic on the set-up for volume sensitive stocks (QGEN, GPRO) as we approach the latter half ofthe year."

Other highlighted points include: Structural issues remain in developed markets, robust growth in emerging markets...Emerging markets remain a bright spot, with most companies reporting robust growth...New product cycles sustain premium valuations."

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