UPDATE: Allscripts (MDRX) PT Lowered to $23 but BofA Securities Sees MSD Growth with Margin Upside
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BofA Securities analyst Michael Cherny lowered the price target on Allscripts (NASDAQ: MDRX) to $23.00 (from $27.00) noting that the company has been in a period of constant transition over the last couple of years with the company's operational improvements and portfolio clean-up leading to the divestiture of the electronic health records (EHR) business. The “new” Allscripts should now be a mid-single-digit growth entity with further upside on already higher structural margins.
The analyst reiterated a Buy rating, stating "The company’s growth has numerous levers going forward, with a stable provider business (80%+ of current revenue) and a small but burgeoning payer and life sciences business that is well positioned to capitalize on broader market trends around data analytics and manufacturer services. This is all underwritten by a significant database that serves as MDRX’s differentiating factor in what is a fairly robust market for payer/life sciences services. All of this should set MDRX up for a steady and profitable/cash flow-generating growth opportunity, with a highly appealing partnership opportunity given how much reach MDRX has across the market."
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