Piper Jaffray Remains Bullish After Hosting Meetings with MEDNAX (MD) Management

Piper Jaffray reiterated an Overweight rating and $76.00 price target on Mednax (NYSE: MD) after hosting meetings with management. Piper came away from the meetings encouraged by the company's acquisition pipeline and ability to grow EBITDA over 10% this year. Piper also believes that the Street does not understand, or is undervaluing, the potential benefit from Medicare's proposed Part B drug payment change for MD's anesthesia business.

Analyst Kevin Ellich commented, "We hosted meetings with MD management and came away encouraged by the company's acquisition pipeline and ability to grow EBITDA over 10% this year. MD's geographic restructuring (one MEDNAX) has already led to new cross-selling opportunities with hospital customers that will bolster growth over the next several years. We believe MD's revenue cycle management business, MedData, is an under-valued gem with organic growth of ~10% and Medicare's proposed change to Part B drug reimbursement could be an incremental positive for MD's anesthesia business. We estimate the proposed payment model change could be ~2-6% accretive to annual EPS, adding $0.08-$0.24. Maintain Overweight rating and $76 PT."

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

Shares of Mednax closed at $65.05 yesterday.

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