UPDATE: Stifel Nicolaus Raises PT to $27 on Healthcare Services Group on Sector Outlook
Stifel Nicolaus maintained Healthcare Services Group (NASDAQ: HCSG) with a Buy rating and raised the price target from $26.50 to $27.00.
Stifel Nicolaus noted, "We believe that the current environment for Healthcare Services Group, notably the growth opportunities created by tight reimbursement and the maturing of its dietary division, warrant a premium multiple. Applying a 5% discount to the company's normalized (for unusually weak first quarter 2012 margins and the reinstated Work Opportunity Tax Credit) trailing P/E multiple yields a target multiple of 33x. Applying this figure to our forward four quarters EPS estimate of $0.82 yields a $27 target price, equating to 13% total return."
Healthcare Services Group closed at $24.66 on Tuesday.
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