UBS Downgrades Premier, Inc. (PINC) to Neutral

UBS analyst Kevin Caliendo downgraded Premier, Inc. (NASDAQ: PINC) from Buy to Neutral with a price target of $38.00 (from $44.00).

The analyst comments "Near-term, we expect an in-line 3Q (see analysis on page 6) and for PINC to talk confidently on its earnings call on November 5 about renewing Yankee Alliance and the Greater New York Hospital Association ("GNYHA") contracts, which combined represent 13% of the company’s GPO fee revenue. We believe management expects to sign new long-term deals by year-end. We estimate re-contracting Yankee and GNYHA to this level could impact F22 Net Admin Fee revenue and Total revenue by ~7%/~4%, respectively (please see our analysis on page 5). While management acknowledged pricing pressure is likely, it is unclear if these two large customers would require max payout ratios given other services they receive. We believe the risk to PINC’s future GPO fee revenue is more in re-contracting than actually losing customers."

For an analyst ratings summary and ratings history on Premier, Inc. click here. For more ratings news on Premier, Inc. click here.

Shares of Premier, Inc. closed at $34.40 yesterday.

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