UPDATE: Stifel Nicolaus Initiates Buy with $72 PT on Mednax; Valuation Attractive

Stifel Nicolaus initiates its coverage on Mednax (NYSE: MD) with a Buy rating and a $72 price target.

Stifel Nicolaus comments, "We like the company's prospects for internal growth and acquisitions of neonatology and anesthesiology practices, and view the current valuation, at only the 14th percentile of historical forward P/E, as an attractive entry point. …Our Buy rating is based on an improving internal growth rate, an increasing pace of accretive acquisitions, and a current valuation well below the median (since 2004) forward P/E of 15.1x. The current valuation is at only 14th historical percentile. Our target price of $72, equal to a median multiple applied to our forward EPS estimate, implies 20% price appreciation."

MD closed at $60.01 on Monday.

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