Currently, the most important issue facing Beckman Coulter (BEC) is the warning letter related to its troponin test kits. This overhang has cut revenues in addition to impacting client additions based on which the outlook has been lowered.
Although Beckman is working with the FDA to conduct the required trial, clearance is not expected before mid-2011. Additional factors affecting the company are lower demand for life science products and delay in cellular product launch.
Given these inhibiting factors, we prefer to avoid this stock until issues are resolved. Accordingly, we initiate coverage on Beckman with an Underperform rating.