Jefferies Comments On Covance On 2Q

According to Jefferies, Covance CVD $60 PT is based on 18.5x the 2012 EPS estimate of $3.24, which is a slight premium to the rest of the group. Jefferies said that its 2012 estimate moves slightly below consensus. CVD continues to command a premium, but valuation at this level is mildly stretched. “Risks: 1) failed recovery in ED, 2) slower backlog conversion and/or cancellations, 3) decline in late-stage margin like that experienced in Early over the last three years.” Covance closed yesterday at $57.68.