Covance’s Acquisition Throws A Wrench In NEO’s Plans, Says Roth Capital


Roth Capital analyst Debjit Chattopadhyay maintained a Buy rating on NeoGenomics Inc. (NASDAQ:NEO) with a price target of $7.00, even though the acquisition of Covance has added uncertainty to the future of its alliance with NEO.

Chattopadhyay noted, “By our estimates, the NPV for the Covance alliance is ~$46M ($0.75/ share). Hence, at current levels NEO shares have fully discounted the alliance and offers an attractive risk/reward profile. NEO is one of the best managed pure plays in cancer diagnostics and based on its rapidly expanding client base, state-of-the-art menu, NEO is a potential target for acquirers, in our view.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Debjit Chattopadhyay has a total average return of -12.4% and a 34.0% success rate. Chattopadhyay has a 2.2% average return when recommending NEO, and is ranked #3313 out of 3362 analysts.

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