J.P. Morgan To Adjust Ratings For NuVasive Following 4Q10 Results

In a report published by J.P. Morgan, NuVasive's NUVA 2011 estimates are to be adjusted following its 4Q10 results.

J.P. Morgan said that, for 2011 it now expects adjusted EPS of $1.10 (-25.5%) on total revenues of $536.2M (+12.1%). “Both of these estimates lie at the high end of management's guidance ranges of $1.07-1.10 and $525-535M, respectively. GAAP EPS ex-unusuals is forecast at $0.50 (-38.9%), down from $0.69 previously, principally due to a higher than expected tax rate (49% vs. our 40% estimate). On a fully taxed basis, adjusted EPS are actually expected to grow 23.4% over 2010. Meanwhile, we model a full year adjusted operating margin of 16.0% vs. guidance of 16.5%, with gross margin projected at 80.9%, down 130bps YOY. We expect Nuvasive's gross margin to remain under pressure going forward, as the company leans on its lower margin international business and biologics franchise to drive growth.”

NuVasive closed yesterday at $27.33.