Jefferies Rates Pharmaceutical Product Development ( PPDI) A Buy

Jefferies & Company analysts David Windley, Timothy C. Evans and Andrew Hilgenbrink reiterated their Buy rating for shares of Pharmaceutical Product Development Inc (Nasdaq: PPDI), with a price target of $32 per share.

The analysts said that Pharmaceutical Product Development Inc management has stated that partnerships and alliances with pharmaceutical companies will continue to play a critical role for the company.

The Jefferies & Company analysts wrote, "our PT is $32 per share. The stock also offers a ~2% dividend yield. Our price target is 19x 2011 EPS estimates, plus $2 for the Furiex spin-off. That multiple is in-line with our target multiple for late stage peers. We think CROs should trade in a mid-to-high teens multiple. Risks: 1) reduced demand for late-stage trials, 2) a lower hit rate on new business, 3) large cancellations, 4) pricing pressure."