Piper Jaffray Raises Price Target on Envision Healthcare (EVHC) Following 2Q EPS Beat
Piper Jaffray reiterated an Overweight rating on Envision Healthcare (NYSE: EVHC), and raised the price target to $45.00 (from $42.00), following 2Q results. EPS of $0.37 was $0.02 higher than consensus of $0.35.Revenue increased 25.9% y/y to $1,354M, which was $50M higher than consensus of $1,304M. EVHC also announced a deal to acquire Rural/Metro for $620M.
Analyst Kevin K. Ellich commented, "Q2 results beat Street estimates due to acquisition contribution in EmCare and midteens organic growth. AMR generated 10% organic growth driven by 7% same-market growth and more impressively, AMR's EBITDA margin expanded ~140 bps to 13.54%. EVHC announced a definitive agreement to acquire competitor Rural/Metro for $620M, which is ~1x revenue and ~7-7.3x pro forma EBITDA, assuming EVHC can achieve $25-28M of synergies. We remain encouraged by the improving operating trends, growth in Evolution Health, and potential accretion and upside from Rural/Metro over the next few years. Maintain Overweight and raising PT to $45."
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Shares of Envision Healthcare closed at $40.61 yesterday.