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Jefferies Raises Price Target on Gentiva Health Services (GTIV) Following Release of FY12 Guidance

January 11, 2012 10:03 AM EST
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Price: $19.19 --0%

Rating Summary:
    1 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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Jefferies is maintaining its Hold rating on shares of Gentiva Health Services (NASDAQ: GTIV) while raising its price target from $4 to $6.

The company released FY12 guidance which calls for total of $1.7-$1.76 billion, just short of the consensus of $1.77 billion. The firm notes the miss maybe due to the Street not fully accounting for the impact of the previously-announced agency closures. Management also offered EBITDA guidance of $170-$190 million.

An analyst at Jefferies comments, "The impetus for last night's guidance release is GTIV's intent to begin negotiations with its bank lenders to loosen some of its credit facility covenants. The combination of slowing volumes in both the home nursing and hospice segments and a net rate reduction in CY12 of ~4% in the home nursing business may put GTIV in violation of leverage ratio requirements on its credit facility, so management is seeking to amend this provision, along with a few others to provide increased flexibility going forward."

Jefferies is reducing its FY12 EPS and sales estimates from $1.25 and $1.78 billion to $1.24 and $1.73 billion.

For an analyst ratings summary and ratings history on Gentiva Health Services click here. For more ratings news on Gentiva Health Services click here.

Shares of Gentiva Health Services closed at $6.73 yesterday.


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