) to hold from buy.
Analyst Cheri Walker says the downgrade is based on valuation as Molecular Devices has risen 40% in the last month, vs. a 6% rise in the S&P 500, to well above her $14 target. She says the stock is trading at 31 times her 53 cents 2003 earnings per share estimate, vs. the average of roughly 20 times for peers.
Walker thinks Molecular Devices' stock shot up on the back of a recent positive report in Barron's, but she doesn't see any operational improvement that is substantial enough to warrant a premium to the group. She believes investors will find better value in Bio-Rad Labs, Invitrogen, Techne, and Fisher Scientific, which have higher visibility and lower valuations. She says Molecular Devices' fundamentals remain intact.