Jefferies Cuts Price Target on DaVita (DVA) to $70; Reiterates Buy
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Jefferies maintained a Buy rating on DaVita (NYSE: DVA), and cut the price target to $70.00 (from $86.00), as Obamacare uncertainty creates risk.
Analyst Chris Cooper commented, "Regulatory concerns restrict valuation but core dialysis is robust (3 Qs of share gains). DVA stepped away from ACA premium assistance for 2k Medicaid patients (1.1% of its total), removing the majority of repeal risk, although the path for 3k ACA patients (otherwise uninsured) is less certain. Our bear case (-$230m EBIT; $500m 'steering' fine) offers 3% upside from current levels; we see strong asymmetric upside risk. DVA trades on 16.0x 2017 P/E for 12% CAGR."
Shares of DaVita closed at $60.30 yesterday.
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