UPDATE: Bank of America Merrill Lynch Reiterates Buy Rating, Raises PT on Mednax
In a report published Friday, Bank of America Merrill Lynch reiterated its Buy rating on Mednax (NYSE: MD), and raised its price target from $89.00 to $95.00.
BofA Merrill Lynch noted, “MD announced it acquired South Oakland Anesthesia Associates in Michigan with 73 anesthesiologists. This is the 7th anesthesia practice acquisition in 2012, bringing the company to its goal of spending $200m on anesthesia deals this year. MD paid cash and expects the deal to be immediately accretive to earnings. We estimate the deal could add $0.15 to EPS over time, one of the more sizable transactions for the company (Anesthesia Medical Alliance of East Tennessee closed on 7/30 was slightly bigger). Since our model does not include anesthesia deals (includes pediatric deals) we are raising our 2013/14 EPS estimates to $5.80/$6.44 from $5.68/$6.29 to reflect today's announcement, and raising our PO to $95 from $89 to reflect the higher numbers and better visibility into the anesthesia deal pipeline. We continue to like MD given the potential upside from deals while we wait for payer mix to stabilize.”
Mednax closed on Thursday at $81.35.
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