Oppenheimer Cuts Price Target on LHC Group (LHCG) to $46 After Meeting with Management
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Oppenheimer maintained an Outperform rating on LHC Group (NASDAQ: LHCG), and cut the price target to $46.00 (from $50.00), after meeting with management. Due to reductions to therapy embedded in the recent 2017 Proposed Rule, LHC expects reimbursement to be reduced by 2.2% in 2017 vs. the 1.0% average reported by CMS.
Analyst Michael Wiederhorn commented, "We attended meetings with the management team of LHC Group and continue to believe the company is well-positioned for growth as the it adapts to changing payor models, while the M&A opportunity remains compelling. However, due primarily to the potential headwind from the proposed home health reimbursement cuts, which appear to be larger than both industry/OPCO initial expectations after considering the company's patient mix, we are conservatively lowering our FY2017 EPS estimate to $2.03 from $2.25 and our price target to $46 from $50. Nevertheless, given the stock's recent performance, we believe this headwind is already embedded in the market and would be buyers of the stock at these attractive levels."
Shares of LHC Group closed at $35.77 yesterday.
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