Evercore ISI Downgrades MedAssets (MDAS) to Hold

Evercore ISI downgraded MedAssets (NASDAQ: MDAS) from Buy to Hold with a price target of $24.00 amid the 16% YTD move higher. The analyst said the excitement over the potential for strategic change is priced in.

Analyst Michael Cherny commented, "We are downgrading shares of MedAssets from Buy to Hold, as we see the excitement over the potential for strategic change to be priced in at current valuation, with the timeline for achieving such changes still somewhat long-dated (and uncertain). Shares of MDAS are up 16% YTD, and >30% from the post-market low following the release of guidance that fell ~18% below consensus at the midpoint. In our opinion, the potential for meaningful operational improvements following the appointment of new Chairman and CEO Halsey Wise and new CFO Anthony Colaluca has been responsible for the recent move up, although the 3 point plan that Halsey intends to implement (Now/Next/After Next) is still in the diagnosis phase, with limited near-term catalysts that could drive further upside. On account of that, we view limited upside to what we view as fair value and therefore downgrade shares to Hold (PT of $24 equates to ~10.5x FY16 EV/EBITDA, although on depressed operating performance)."

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

Shares of MedAssets closed at $22.30 yesterday.

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