UPDATE: Cowen Downgrades Cerner (CERN) and Allscripts (MDRX) to Market Perform
- Wall Street flat as countdown to Trump's swearing-in begins
- Netflix, Inc. (NFLX) Tops Q4 EPS by 1c; Subs Beat Views
- Apple (AAPL) PT Raised to $140 at BofA/Merrill Lynch; iPhone 8 Will be 'Super-Long' Cycle
- Morgan Stanley Upgrades Tesla Motors (TSLA) to Overweight
- CP's (CP) Outgoing CEO Hunter Harrison, Activist Paul Hilal Said Set to Target CSX Corp. (CSX)
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
(Updated - September 8, 2016 7:55 AM EDT)
Cowen downgraded Cerner (NASDAQ: CERN) and Allscripts (NASDAQ: MDRX) from Outperform to Market Perform with price targets of $65 (unchanged) and $14 (prior $17). Analyst Charles Rhyee thinks valuation fairly reflects moderating long-term growth expectations.
"While recent fundamentals have cleared a low bar, we don't think new rev oppties are likely to expand fast enough to accelerate growth over a maturing base and reflate multiples," said Rhyee.
"For CERN, we believe the growth issue is largely a function of the law of large numbers as CERN approaches $5B in annual revenue in 2016. While we still view CERN as a high-quality company and the HCIT public market leader, the issue has become what multiple to pay for a business we believe is starting to enter a more mature stage," continued the analyst.
Discussing Allscripts, the analyst said, " MDRX faces many of the macro headwinds to growth faced by CERN, albeit at a smaller scale. While this should make growth more attainable, MDRX has struggled to return to meaningful top-line growth and it is hard to see a significant catalyst that would change this. MDRX is only expected to post organic rev growth of 4% in 2016, with mgmt targeting 5-7% growth L-T, which we think makes it harder to leverage earnings growth over its fixed cost base. MDRX’s reliance on services amidst a continued decline in system sales also continues to cap top-line growth."
Shares of Cerner closed at $65.00 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Barclays Downgrades Cerner (CERN) to Equalweight
- Mallinckrodt (MNK) Positive Thesis 'Intact' Following FTC Settlement - Guggenheim
- General Motors (GM) PT Raised to $36.00 at Jefferies
Create E-mail Alert Related CategoriesAnalyst Comments, Downgrades, Hot Comments
Related EntitiesCowen & Co, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!