UBS Cuts Price Target on Cerner (CERN) Following ACA Uncertainty

UBS maintained a Neutral rating on Cerner (NASDAQ: CERN), and cut the price target to $52.00 (from $60.00), following uncertainty surrounding the potential ACA unwind.

Analyst Michael Cherny commented, "The uncertainty created around the potential ACA unwind has driven questions over near-term hospital CapEx budgets, which has already been felt (alongside regulatory changes) across the Health IT space. For Cerner in particular, with a continued moderation of the overall growth rate (as the company has become bigger and backlog is recognized over a longer period of time) has changed the valuation dynamic for the stock, which despite a strong 10-year average has dipped into the teens range on NTM P/E during the financial crisis. Given these industry concerns, combined with the recent volatile operating performance, we have reduced our estimates and are reducing our PT from $60.00 to $52.00, with our new PT representing ~20x FY17 P/E (more like a highend healthcare services company)."

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

Shares of Cerner closed at $49.40 yesterday.

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