UPDATE: ISI Group Downgrades Allscripts Healthcare Solutions to Neutral, Raises PT Following Recent Outperformance

In a report published Monday, ISI Group analyst Michael Cherny downgraded the rating on

from Buy to Neutral, but raised the price target from $15.50 to $16.50. In the report, ISI Group noted, “We have downgraded our rating on MDRX from Buy to Neutral following the recent stock outperformance (shares rallied ~14% this week following a positive pre-announcement of bookings for 2Q). MDRX shares are up more than 70% from the December 2012 lows following the halting of the strategic review process and the installation of Paul Black as CEO. We had defended MDRX at that time, saying that shares had been overly punished and that pullback was a significant buying opportunity. With the share price appreciation since then (MDRX has been the best performer in the ISI HS&T universe), we view current trading levels as more accurately reflecting the near-term for the turnaround plan. While we still see this plan as on track and view this week's bookings announcement (as well as the managed IT services extension with North Shore-LIJ) as clear positives, we view the next leg of upside to the share price as predicated on getting better visibility into FY14 growth. We have increased our PT from $15.50 to $16.50 to reflect the 2Q bookings performance, but with only 6% upside to our PT, we now rate shares at Neutral.” Allscripts Healthcare Solutions closed on Friday at $15.52.