Cerner (CERN) PT Cut to $75 at UBS on Mixed Outlook
UBS analyst Steven Valiquette reiterated a Buy rating but lowered his price target on Cerner (NASDAQ: CERN) to $75.00 (from $80.00) following Q3 results which also included a mixed outlook.
commented, "While the local Royals just won the World Series, Kansas City based CERN does not appear to have hit the ball out of the park with its mixed 2016 view. Mgmt expects '16 revs of over $5 bil (+13% y/y; +11% organic) and EPS $2.30-2.40. All-in, the positive here is CERN expects to post organic double digit organic top-line growth. On the downside, there is less op leverage than initially expected, but this is seemingly transitory. Revs are essentially in line with the Street's $5.1 bil est while EPS is below the Street's $2.53 est. The differential in EPS was due to higher non-cash exp and lower contributions from professional services. Mgmt quantified the non-cash exp as a $75-80 mil hit (~$0.14-0.15 '16 EPS by our math). Perhaps the silver lining here is that as CERN moves beyond the non-cash exp, CERN may see greater leverage in 2017."
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Shares of Cerner closed at $66.09 yesterday.