BTIG Notes 4 Reasons To Buy Hologic

In a report published Thursday, BTIG Research analyst Sean Lavin initiated coverage on Hologic Inc. (NASDAQ: HOLX) with a Buy rating and $26.00 price target.

Lavin noted four main reasons to buy this mid cap med tech company. The analyst first emphasized that earnings growth is "almost automatic" if the company can provide a flat revenue and buy back shares. BTIG Research emphasized "as earnings growth shows up, a higher multiple should follow." Although ThinPrep declines worry the analyst, he noted strong growth by the 3D mammogram and MyoSure products.

The second reason encompasses the company's long term growth and the investment opportunity this provides. Sean Lavin models a total of 20 percent earnings growth in FY15 and FY16. He expects the multiple to increase by 10 percent and lead shares to approximately 30 percent higher over two years.

BTIG Research continued the list noting the "upgrade" with the new CEO. The analyst commented, "Stephen MacMillan's previous tenure at Stryker and JNJ (Both BTIG Not Rated) should prepare him well to obtain operational efficiencies and international growth. The previous mgmt. had fallen out of favor with a number of investors."

The analyst's last point, key innovation, truly separates companies who are willing to commit to meaningful technology for the future. Lavin highlighted Hologic's 3D Breast Tomosynthesis and PANTHER with full automation. He reported that both have "competitive edges" and should aid in the company's growth. The analyst added that 3D reimbursement could create an "inflection point" in mammography sales.

Shares of Hologic closed at $20.73 on Thursday, up 1.22 percent.