Shares of Qiagen rose almost 3% in Tuesday’s pre-market trading after the medical diagnostics company lifted its financial outlook for 2020 and 2021.
Qiagen (QGEN) said it now expects net sales for the fourth quarter to grow at least 32% at constant exchange rates (CER) year-on-year, compared to the previous guidance for an increase of 24% to 27%. The company anticipates adjusted EPS to climb to $0.64-0.65 CER from $0.48 during the same period a year ago.
For the full-year 2020, net sales are targeted to grow 22% CER year-on-year, up from the previous forecast for an increase of about 20%. Adjusted EPS is forecasted to be in the range of $2.13-2.14 CER, compared to $1.43 in 2019. The guidance was lifted from a previous outlook for adjusted EPS to land between $2.07-$2.09.
“We have responded to the demands of the COVID-19 pandemic by launching novel testing solutions and ramping up production capacity,” said Qiagen CEO Thierry Bernard. “As we finish 2020 with an improved outlook, we have confidence in our future and in the benefits of our unwavering focus on our five pillars of growth.”
Looking ahead, Bernard added “We expect another strong performance in 2021, balancing investments in our portfolio to create new organic long-term growth opportunities with improved near-term earnings to deliver significant value creation.”
As for the full-year 2021, Qiagen anticipates net sales to grow 18-20% CER from the midpoint of the forecasted 2020 net sales range. Adjusted EPS is expected to be between $2.42-2.46 CER.
To achieve the raised financial outlook, Qiagen has significant investments planned for R&D and clinical trials, it said. Specifically, the company will follow through on projects to enlarge the test menu for its NeuMoDx and QIAstat-Dx systems in the US and Europe.
Last month, Qiagen rolled out the marketing and distribution of its QIAreach SARS-CoV-2 antigen test in the US after applying for FDA emergency use authorization (EUA) for symptomatic patients. The mass screening test, developed in partnership with Australian digital diagnostics company Ellume, can be used by laboratories to detect SARS-CoV-2 antigens in infected individuals within 2-15 minutes.
Merrill Lynch analyst Derik De Bruin recently reinstated the stock’s coverage with a Buy rating and price target of $59 (21% upside potential), amid optimism that Qiagen’s new products may be accelerated by COVID-19. The analyst cautioned though that execution risks remain.
“With a new CEO in place and new products in the portfolio, QGEN has the opportunity to reinvent itself, especially when it comes to deploying capital, further reducing the cost structure, and delivering on expectations,” De Bruin commented in a note to investors. (See QGEN stock analysis on TipRanks)
Qiagen shares have rallied 45% so far this month and analysts are cautiously optimistic on the stock with a Moderate Buy consensus. Looking ahead, the average price target stands at $58.26, implying another promising 19% upside potential in the coming year.
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