Jefferies Reiterates Buy on Almost Family (AFAM) Following 80% Interest Acquisition in Home Health Business
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Jefferies reiterated a Buy rating and $58.00 price target on Almost Family (NASDAQ: AFAM) following the company's acquisition of 80% interest in CYH's home health business. AFAM will be the nation's 3rd largest home health provider upon completion of the CYH deal in Q4, which will add $170MM of home health revenue and $30MM of hospice revenue.
Analyst Brian Tanquilut commented, "We have a positive view on AFAM shares given our belief that the stock is meaningfully undervalued (12x P/E, 8.5x EV/EBITDA), particularly given its fairly predictable earnings power, the company's position as a leading consolidator in the highly attractive home nursing space, and accelerating LT growth outlook. We also believe that AFAM's acquisition of CYH's home health assets is very accretive (+19% to FY17 EPS) and isn't adequately reflected in the stock."
Shares of Almost Family closed at $38.75 yesterday.
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