UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on On Assignment
In a report published Friday, BMO Capital Markets reiterated its Outperform rating on On Assignment (NYSE: ASGN), and slightly raised its price target from $23.00 to $24.00.
BMO Capital noted, “The ‘upside surprise' (at least versus our estimates) was mainly margin driven, as revenues of $388.3 million was just above $382-$388 million guidance, while adjusted EBITDA margins increased to 11.7% from 11.2% in 3Q11 – well above our 11.1% estimate and the highest since 2001. ASGN is dominated by its technology offerings (roughly 75% of revenues), which grew y/y (pro forma) in the high teens, by our estimates – likely faster than the market. Its healthcare and physician offerings (15% of revenues) are also showing solid growth as those sectors come back to life. While Life Sciences (10% of revenues) is struggling owing to a challenging environment, ASGN's diversification strategy is helping to offset that. While the company is not immune from the slower growth facing the sector, we still believe ASGN has and will continue to take share.”
On Assignment closed on Thursday at $19.48.
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