The following excerpts explain why Zacks senior electrical industry analyst Gregory Aurand, CFA remains neutral on Greatbatch, Inc. (GB):
'The company completed the acquisition of Precimed, expanding into orthopedics. Based on this and fourth quarter 2007 acquisitions, management raised its preliminary revenue outlook for 2008 to $500-$550 million. While increasing our revenue estimates, our 2008 EPS estimates again decline on lower interest income, acquisition dilution and overall higher SG&A and RD&E expenditures.
'While diversifying, the company is taking on integration risk as it moves beyond a CRM original equipment manufacturer (OEM). Given the expanded diversification, we believe the stock should be valued in-line to the group 2008 P/E/G of 1.5x. On our lowered 2008 EPS estimate of $1.34, our target remains at $24 and we rate the shares as Hold.'
