Team Health (TMH) PT Raised to $72 at Piper Jaffray Following IPC Deal

Piper Jaffray analyst Kevin Ellich reiterated an Overweight rating and raised his price target on Team Health (NYSE: TMH) to $72.00 (from $68.00), saying they remain buyers of the stock after the the company announced a definitive agreement to acquire IPCM for $1.6B.

Ellich commented, "While on the surface the transaction appears expensive, we have confidence TMH will be able to achieve $60M of cost and revenue synergies within 3 years and we believe upside could be driven by BPCI which we estimate could add $30-40M of incremental EBITDA or $0.26 to $0.35 of EPS in the 2016/2017 timeframe. We expect IPCM to be modestly accretive in 2016 (not included in our estimates yet) with accretion ramping over the next couple of years. Based on strong Q2 revenue growth, TMH raised its FY15 revenue growth guidance to 24-26%, while adjusted EBITDA margin guidance was maintained. We increased our estimates and raised our PT to $72. Maintain Overweight."

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

Shares of Team Health closed at $64.68 yesterday.

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