Barclays Reiterates an 'Overweight' on Universal Health Services (UHS); Views Facility Divestitures for PSYS Deal
UHS Hot Sheet
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Barclays reiterates an 'Overweight' rating on Universal Health Services (NYSE: UHS), PT $46.
Barclays analyst says, "Last night, UHS announced that it had closed on its previously announced acquisition of Psychiatric Solutions (Nasdaq: PSYS). In addition, UHS announced that it reached an agreement with the FTC to divest four psychiatric hospitals in order to gain the FTC's approval of the transaction, which was in-line with our expectations. On the surface, the divestitures will result in some modest dilution (likely in the $0.05-$0.07 range); however, the EBITDA at PSYS has been coming in well ahead of expectations over the past few quarters and UHS's borrowing costs are lower than they originally believed too. As a result, we continue to believe there is more potential for upside rather than downside to our above-consensus 2011 EPS estimate of $3.50."
For more ratings news on Universal Health Services click here and for the rating history of Universal Health Services click here.
Shares of Universal Health Services closed at $40.89 yesterday, with a 52 week range of $28.40-$60.66.
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Barclays analyst says, "Last night, UHS announced that it had closed on its previously announced acquisition of Psychiatric Solutions (Nasdaq: PSYS). In addition, UHS announced that it reached an agreement with the FTC to divest four psychiatric hospitals in order to gain the FTC's approval of the transaction, which was in-line with our expectations. On the surface, the divestitures will result in some modest dilution (likely in the $0.05-$0.07 range); however, the EBITDA at PSYS has been coming in well ahead of expectations over the past few quarters and UHS's borrowing costs are lower than they originally believed too. As a result, we continue to believe there is more potential for upside rather than downside to our above-consensus 2011 EPS estimate of $3.50."
For more ratings news on Universal Health Services click here and for the rating history of Universal Health Services click here.
Shares of Universal Health Services closed at $40.89 yesterday, with a 52 week range of $28.40-$60.66.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
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