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Robert W. Baird cut its investment opinion on MGI Pharma, INC (MOGN
) to neutral from outperform.
Analyst Christopher Raymond said that on the surface MGI Pharma's third quarter number appears essentially in line with his estimates. The non-GAAP earnings per share is just a penny shy of his estimate, while the Aloxi business is in line with his just-lowered estimate. But he's less impressed with the company's operational progress, as its cash flow swung back into negative territory, which has implications for 2006 and beyond. He thinks a few quarters of consistent operational execution will be required before he recommends the stock. As such, he's moving to the sidelines on MGI and cut his 62 cents 2006 earnings per share estimate to 29 cents.