UPDATE: Barrington Research Starts BioScrip (BIOS) at Outperform

(Updated - November 20, 2014 10:17 AM EST)

Barrington Research initiated coverage on BioScrip (NASDAQ: BIOS) with an Outperform rating and a price target of $8.00.

Analyst Michael Petusky said, "The company has struggled in recent quarters due to the integration of some recent acquisitions and expenses have ballooned as a result. That said, management announced earlier this month that the company had identified approximately $15 million in potential annual savings including: a reduction in delivery costs and drug and supply costs, various corporate and field operations streamlining initiatives, and a reduction in corporate infrastructure. We believe that around $10 million of these benefits will positively impact 2015, with the remainder impacting 2016."

"We arrive at our price target by attaching a 15x multiple to our 2015 EV/EBITDA estimate and a 12x multiple to our 2016 estimate of EV/EBITDA. Shares currently trade at about 18x on a 2014 EV/EBITDA expectation basis," he added.

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

Shares of BioScrip closed at $5.80 yesterday.

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