Auriga Downgrades Omnicell (OMCL) to Hold; Tougher Competition on Continued Lackluster Hospital Spending
OMCL Hot Sheet
Rating Summary:1 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Auriga downgrades Omnicell (Nasdaq: OMCL) from Buy to Hold. price target lowered to $12 from $13.
Auriga analyst says, "The combination of a continued lackluster hospital spending environment, heated competition from CareFusion (NYSE: CFN) (NR) and, more recently, Cerner (Nasdaq: CERN) (HOLD), and uncertainty over Omnicell’s FY10 outlook leads us to reduce our price target to $12 from $13 and downgrade the shares to HOLD. While the company has excellent visibility into the balance of FY09, we think some substantial new business wins will be required to restore Omnicell to double-digit top-line growth in FY10. We believe our estimates, which reflect mid-single-digit growth, accurately reflect this cautious tone, but a combination of spending deferrals and intensifying competition could skew the forecast. We think a CFN-like multiple of 18x ($0.44 FY10 Estimate) is appropriate to use with OMCL, and add the company’s near $4/share in cash to derive our $12 target."
To see more analyst ratings on OMCL Click Here.
Omnicell, Inc. provides medication control and patient safety solutions for acute care health facilities.
Auriga analyst says, "The combination of a continued lackluster hospital spending environment, heated competition from CareFusion (NYSE: CFN) (NR) and, more recently, Cerner (Nasdaq: CERN) (HOLD), and uncertainty over Omnicell’s FY10 outlook leads us to reduce our price target to $12 from $13 and downgrade the shares to HOLD. While the company has excellent visibility into the balance of FY09, we think some substantial new business wins will be required to restore Omnicell to double-digit top-line growth in FY10. We believe our estimates, which reflect mid-single-digit growth, accurately reflect this cautious tone, but a combination of spending deferrals and intensifying competition could skew the forecast. We think a CFN-like multiple of 18x ($0.44 FY10 Estimate) is appropriate to use with OMCL, and add the company’s near $4/share in cash to derive our $12 target."
To see more analyst ratings on OMCL Click Here.
Omnicell, Inc. provides medication control and patient safety solutions for acute care health facilities.
You May Also Be Interested In
- UPDATE: UBS Downgrades Wisconsin Energy (WEC) to Neutral; Taking Some Off The Table
- Goldman Sachs Cuts Numbers on Tiffany & Co. (TIF) after Weak Q1, Guidance
- Barclays on U.S. REITs: Best Ideas List: Adding HPP; Removing ARE
Create E-mail Alert Related Categories
DowngradesSign 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!
