Wall Street’s industry analysts are overwhelmingly bullish on the prospects of Durham pharmaceutical services company Patheon.
On Monday nine industry analysts initiated coverage of Patheon, which went public last month, and eight of them rated the company’s stock the equivalent of a “buy.” Those eight also established 12-month price targets for Patheon shares that ranged from a low of $30 to a high of $32.50.
Patheon went public at $21 a share. Its sharses closed Monday at $27.56, up 56 cents – or 31 percent higher than the IPO price.
“We believe organic revenue growth for Patheon can be sustained in the high single digits,” William Blair & Co. analyst John Krege wrote in a research note.
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No analysts had initiated coverage of Patheon before this week. The Securities and Exchange Commission requires analysts whose firms were involved in an IPO to observe a “quiet period” of 25 calendar days before issuing any research reports on a company.
Patheon generated $1.77 billion in revenue in its latest fiscal year. The company manufactures and packages prescription and over-the-counter drugs for its clients. It also provides services such as developing formulations of experimental medicines and synthesizing chemicals for a broad range of industries.