) to buy from hold.
Analysts Alex Hittle and Craig West say the company is a successful operating story, and has positioned itself as a premium partner. They believe DNA has quietly assembled one of the better R&D efforts in genome mining. They also think Genentech's pipeline is quite rich despite recent setbacks, and think the company's Avastin failure creates an opportunity to buy this premier biotech.
Hittle and West see $0.92 2002 earnings per share and $1.10 for 2003. They have a 12-month to 18-month $35 target. They believe, too, that after five years of growth, shares will gradually settle over the following five years to a 7% terminal growth rate.