Goldman Sachs Raises PT, Reiterates CL-Buy On Sirona Dental Systems Following Recent Earnings Release

Sirona Dental Systems SIRO 2QFY11 results came with better-than-expected sales from its two key equipment categories, and increased revenue and operating profit guidance. Results across dental this quarter demonstrate that there is healthy demand for high-tech equipment and that a recovery is underway. Constant currency growth from CAD/CAM and Digital Imaging were strong at 17% and 22%—7% and 9% better than our forecasts, respectively. Goldman finds the results particularly impressive considering the anticipated pick up in sales in 2HFY11 as a result, in part, of a strong showing at this year's International Dental Show in late March. Goldman reiterates its CL-Buy on SIRO given: interest in high-tech equipment investment; accelerated growth in CAD/CAM and Digital Imaging, with support from new product launches; and an attractive valuation, with shares trading at 10.8X our CY2012 EBITDA versus dental peers of 11.2X. Goldman Sachs has a $66 PT on SIRO SIRO closed Friday at $55.39