KeyBanc Starts Invacare (IVC) at Hold

KeyBanc initiated coverage on Invacare (NYSE: IVC) with a Hold rating.

Analyst Matthew Mishan said, "We are initiating coverage of Invacare Corporation (IVC-NYSE) with a HOLD rating as, while we do believe there are several positives and that the Company will work through near-term challenges, there are too many moving pieces for us to be confident in our long-term normalized earnings number at this time."

"More specifically, we believe that:1) IVC is a global leader in home durable medical equipment; demographics support long-term growth and a case for homecare could be compelling in that it is patient preferred and cost effective; 2) the consent decree is in its final stages, and while timing is uncertain, full manufacturing operations could potentially resume at some point later in the year; 3) despite certain headwinds, the underlying business appears healthy, and going forward, sales growth should re-emerge and losses begin to reverse; 4) post consent decree, management will begin to disseminate and implement its globalization initiatives, which it believes could yield ~$100 million in cost savings; however, there are offsets in increased R&D and pricing; 5) the Company is now relatively unlevered, and upon return to profitability, should generate free cash flow and have the financial flexibility to fund its internal initiatives and do either M&A or other shareholder-friendly actions; and 6) the ultimate value of the stock will likely be tied to a more normalized earnings number, which we estimate at $1.50-$2.00," he said.

For an analyst ratings summary and ratings history on Invacare click here. For more ratings news on Invacare click here.

Shares of Invacare closed at $18.56 yesterday.

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