Jefferies Cuts Price Target on Surgery Partners, Inc. (SGRY) to $24 Following 3Q
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Jefferies maintained a Buy rating on Surgery Partners, Inc. (NASDAQ: SGRY), and cut the price target to $24.00 (from $27.00), following the company's 3Q earnings report. SGRY put up strong SS rev growth of +10.3% in Q3, which highlights the company's ability to continue driving consistent, double-digit same-store growth. Guidance was adjusted down due to the timing of acquisitions & weather related issues. SGRY adjusted its 2016 EBITDA guidance to $179-$184MM (prior $184-$191MM) as a result of its 4 Q3 acquisitions closing at the end of the quarter rather than early in the quarter as planned.
Analyst Brian Tanquilut commented, "We remain bullish on SGRY given our view that 1) the company is wellpositioned to continue delivering very healthy organic growth (+10.3% in Q3 despite expected July softness), 2) tailwinds from new complex procedures (i.e., ortho) shifting to ASCs will provide an incremental LT growth driver, & 3) a strong M&A pipeline will continue to boost growth. Trading at 0.7x PE/G & 9.5x EBITDA, we believe SGRY is compelling at current levels."
Shares of Surgery Partners closed at $14.60 yesterday.
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