Piper Jaffray Upgrades MWI Veterinary Supply To Overweight

Piper Jaffray is upgrading shares of MWI Veterinary Supply MWIV to Overweight following very impressive FQ1 results that easily exceeded Piper's expectations. It had been Neutral on the stock strictly based on valuation relative to expectations for future growth, though with the FQ1 outperformance Piper is increasing its estimates significantly for FY11 and FY12. Piper Jaffray is very positive on the MWIV story and believes there is additional upside to estimates resulting from organic growth, further operating leverage and non-modeled acquisitions. Piper continues to view the FY11 guidance as conservative and believe further upward revisions are possible, with stronger revenues from the production animal business the likely key driver. It is upgrading shares of MWIV to Overweight and increasing the PT to $75 per share. MWIV's high quality FQ1 beat, optimistic outlook during its earnings call, and Piper's expectation for continued outperformance for the rest of FY11 makes it comfortable that the stock should trade at a slight premium to its long-term growth rate. It's revised estimates now call for earnings growth of approximately 20% in FY11, with mid-teens growth now anticipated during FY12. MWIV is trading higher at $65.23