Deutsche Bank Upgrades Acadia Healthcare (ACHC) to Buy, Boosts Target to $19

Deutsche Bank upgraded Acadia Healthcare (NASDAQ: ACHC) from Hold to Buy. The price target was raised from $15 to $19.

The firm said, "With the recent equity offering, the balance sheet and capacity to accretively acquire put it in a place where the next meaningful N-T move in the shares is likely to be up and not down, in our view. Given the growth outlook and improved capital structure, we believe a higher multiple is warranted (we go from 8.5x to 9.5x 2013E EV/EBITDA or 20x P/E)..."

Deutsche Bank continues to like: "(1) attractive organic growth in the behavioral segment; (2) reasonably good consolidation opportunities, including mid-sized chains that could “move the needle”; and (3) solid FCF and ROIC characteristics given the margin profile (low/mid-20% EBITDA margins) and low capex requirements (2%-3% of rev)."

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

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