holx

NEW YORK ― Shares of medical imaging systems maker Hologic Inc. rose Monday after an analyst said the company's buyout of Cytyc Corp. will make Hologic stock more stable.

CIBC World Markets analyst Amit Hazan initiated coverage of Hologic with a rating of "Sector Outperformer," or "Buy," and a price target of $77 per share.

The stock gained 70 cents, to $55.82 in morning trading.

Hologic agreed to buy Cytyc in May, and Cytyc shareholders will vote on the acquisition next month. Hazan said the combined company will have steady repeat business, with recurring Cytyc customers bringing in more than half of overall revenue.

"Cytyc should greatly stabilize sales with its recurring high-margin products, reducing volatility in the stock," he said.

Sales should keep growing as use of Hologic's digital mammography products increases, he added.

Twelve analysts rate Hologic shares "Buy" or the equivalent, while one gives a "Hold" rating.
Hologic Inc. (HOLX) opened at 55.80. So far today, the stock has hit a low of 55.50 and a high of 56.80. HOLX is now trading at 56.01, up 0.98 (1.76%). The stock hit its 52 week high of 63.18 in April and set its 52 week low of 40.80 in September. HOLX rose during 2006, but has been moving sideways recently. Hologic shares have been climbing today after CIBC World Markets analyst initiated coverage on the stock with a rating of "Sector Outperformer," or "Buy," saying the company's buyout of Cytyc Corp. will increase revenue. The broker set a price target of $77 per share. Technical indicators for the stock are neutral and improving while S&P gives HOLX a very positive 5 STARS (out of 5) strong buy rating. If you're looking for a hedged play on this stock, consider a December bull-put credit spread below the $45 range. HOLX stock could fall up to 19.7% before expiration and this position would still be profitable. [RHF - Seven Summits Strategic Investments NewsBite]
MOST NOTEWORTHY: VMWare, Validus Holdings and Hologic were today's noteworthy initiations:

VMWare Inc (NYSE: VMW) was initiated by a host of firms: Banc of America believes the current valuation captures most of the upside potential, and started shares with a Neutral rating and $75 target. Wachovia started shares with a Market Perform rating and Deutsche Bank started shares with a Hold rating and $80 target on valuation. The stock was also started with a Buy rating and $92 target at UBS, with a Buy rating and $100 target at Citigroup and with an Overweight rating at JP Morgan and with a Neutral rating at Merrill Lynch.

Validus Holdings (NYSE: VR) was started with a Buy rating and $29 target at UBS on valuation and benefits from the Talbots (NYSE: TLB) acquisition. Shares were also initiated at JP Morgan with a Neutral rating.

CIBC resumed coverage of Hologic Inc (NASDAQ: HOLX) with a Sector Outperformer rating and $77 target as the firm is positive on Hologic's merger with Cytyc Corporation (NASDAQ: CYTC) and views it as one of the top mid-cap stories in the coming year.
OTHER INITIATIONS:

B. Riley initiated shares of EuroBancshares (NASDAQ: EUBK) with a Buy rating and $10 target.

Rodman resumed coverage of Ziopharm Oncology Inc (NASDAQ: ZIOP) with a Market Outperform rating and $8 target.

Citigroup started shares of Timken Company (NYSE: TKR) with a Buy rating and $43 target.