) to buy from neutral.
Analyst Katherine Martinelli says Swiss medical-device maker Centerpulse has formally accepted orthopaedic implants maker Zimmer's $3.2 billion acquisition offer, and pieces appear to be in place for the deal to close in October. Martinelli thinks the pending acquisition should position Zimmer to deliver a significant step-up in earnings per share growth. Admittedly, she says top-line comparisons will toughen going forward, and she thinks 2004 will have number of challenges given the integration of Centerpulse.
However, she suspects investors will increasingly focus on Zimmer's earnings per share prospects in 2005 where she now estimates $2.25 earnings per share. Martinelli has a $58 12-month target.