eResearch Technology Report Good Chance For Upside

According to Auriga, eResearch Technology ERES reported a good chance for upside. Auriga reported that from the standpoint of risk/return, eResearch thinks the profile is more favorable at current levels, vs. when the stock was trading north of $8 into Q3 earnings. “While we think the quarter will be inline or better (benefitting from a seasonally strong Q4), we think management's 2011 guidance will be conservative, as it 1) contemplates the first full year that the respiratory business is a part of ERT, and 2) will likely build in some continued investment into a new, integrated release of its expERT ECG platform, planned for launch in H211. As such, we are reducing our Street-high FY11 estimates ahead of earnings. Nonetheless, we find ERES trading at a substantial discount to Contract Research Organization (CRO) comps, and find the risk/reward attractive at current levels.” eResearch Technology closed yesterday at $6.32.