UPDATE: Stifel Nicolaus Raises PT to $25.50 on Healthcare Services Group
Stifel Nicolaus reiterated its Buy rating on Healthcare Services Group (NASDAQ: HCSG) and increased its price target from $23 to $25.50.
Stifel Nicolaus said, "The company has allayed fears concerning rising food costs by restructuring its Dietary contracts. In the Housekeeping division, HCSG's contracts grow in line with its clients' blue-collar wage growth, which HCSG passes on to its employees. Its Dietary contracts are based on a combination of both labor and a measure of food price inflation, insulating HCSG from commodity fluctuations and preserving its margins. We have raised our Dietary division revenue expectations to assume less contract churn and more sustainable growth going forward."
Healthcare Services Group closed at $23.52 on Tuesday.
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