Healthcare Services Group (HCSG) PT Lowered to $27 at Stifel After Reporting Miss

July 26, 2021 7:15 AM EDT
Get Alerts HCSG Hot Sheet
Price: $25.27 -2.62%

Rating Summary:
    3 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 15 | New: 24
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Stifel analyst Tao Qiu lowered the price target on Healthcare Services Group (NASDAQ: HCSG) to $27.00 (from $31.00) after the company reported a 2Q revenue and EPS miss as it granted concession to Genesis on lower payment until the end of 2021 and more lenient credit terms until the end of 2022.

The analyst reiterated a Hold rating, stating "Investors have been concerned about Genesis' financial health. Given the new Genesis CEO's restructuring track record, the move is not surprising. What disappointed us was that dietary services margin came in lower than expected from supply cost normalization and onboarding of a new contract while the size of contract added in 3Q also missed our view. We are therefore lowering our 2021 EPS estimates by 13% and target price to $27 from $31. We reiterate Hold rating based on subdued growth near term despite strong balance sheet and attractive dividend."

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