UPDATE: Stifel Nicolaus Downgrades Bright Horizon Family Solutions to Hold, Valuation Fair
In a report published Thursday, Stifel Nicolaus analyst Robert L. Craig downgraded Bright Horizon Family Solutions (NYSE: BFAM) from Buy to Hold and removed its $34.00 price target.
In the report, Craig wrote, "The shares are now selling at just over 24x our 2014 adjusted EPS estimate of $1.43, nearly 28x forward-12 estimated EPS of $1.25 and an EV/EBITDA multiple of 12.7x on 2014 estimates. By comparison, the peer group multiples average 20x and 9.2x on 2014 consensus and BFAM's historical valuations were 24x forward-12 and 11x EV/EBITDA, respectively. Current valuation is fair, in our opinion, given expected EPS growth approximating 20+% per year. All else being equal, we would look to return to a more aggressive stance in the high 20s. The stock is up over 20% since our coverage initiation at $28.35 (vs. the S&P 500 up 1%) and up nearly 60% since the IPO pricing at $22 (above the filing range of $19-$21) mid January vs. the S&P 500 up 4%."
Shares of Bright Horizon Family Solutions closed at $34.76 on Wednesday and are currently flat after this report.
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