Thoratec rises following analyst upgrade to 'Buy'

NEW YORK -- Thoratec Corp. shares rose Wednesday after a UBS analyst upgraded the stock, saying he is more confident in the heart device maker's growth prospects.

THE SPARK: Analyst Rajeev Jashnani raised his rating on Thoratec shares to "Buy" from "Neutral," and increased his price target to $39 per share from $35. He said Thoratec's growth is likely to slow down in the next few years as competition increases, but it should remain solid and Wall Street's expectations for the company are low.

Jashnani added that Thoratec has reported strong net income and revenue growth, but its stock is trading at about the same price it was two years ago.

THE BIG PICTURE: The Pleasanton, Calif., company makes HeartMate pumps, which are used in patients who are waiting for a heart transplant or for those who are too sick to have heart transplant surgery. It also makes acute surgical support products like its external CentriMag and PediMag pumps.

The company's revenue rose 10 percent in 2011 and is up 16 percent in the first half of 2012. Thoratec currently forecasts $460 million to $470 million in revenue for 2012, up 9 to 11 percent from the previous year.

Analysts on average expect $471 million, according to FactSet.

SHARE ACTION: Shares of Thoratec gained $1.19, or 3.5 percent, to $35.48 in afternoon trading. The shares have traded between $27.84 and $38.07 in the last 12 months and are up about 5.7 percent in 2012.