UPDATE: Oppenheimer Starts Cerner (CERN) at Outperform

(Updated - June 18, 2015 8:40 AM EDT)

Oppenheimer initiated coverage on Cerner (NASDAQ: CERN) with an Outperform rating and a price target of $89. Analyst Mohan Naidu thinks the company is positioned to gain market share.

"Cerner is strengthening its market share position with consistent growth in new footprint and add-on sales. We believe the company is positioned to gain significant share of the technology spending from providers, especially as the providers navigate the new reimbursement models. While the Health Services acquisition pressures the growth rate and margins near term, we believe the acquisition sets up the Millennium platform very well for replacement opportunities in these customers," said Naidu.

The analyst added, "Pace of services contracts (RevWorks, ITWorks, etc.) should accelerate over the next few years. A steady stream of replacement opportunities coupled with the upsell opportunities within the company’s customer base for new solutions and services makes us believe in growth sustainability. "

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 $67.81 yesterday.

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