Morgan Stanley Sees Contract Renewal Delay As Potential Catalyst For Performant Financial

In a report published Friday, Morgan Stanley analyst Suzanne E. Stein reiterated an Overweight rating and $12.00 price target on

. In the report, Morgan Stanley noted, “The delay in the award of the RAC contract is causing significant disruption in Performant's healthcare results while changes to the Guaranty Agency fee structure will begin to negatively impact student lending results in 2H14. We think these issues are well understood by the market and are reflected in the stock price. As these uncertainties clear, particularly the award of the RAC contract, we see room for significant upside in the stock. "Further, we believe revenue contribution from non-traditional sources, such as commercial healthcare customers, will become more material which will also help the recovery of the stock. We remain Overweight with a $12 price target.” Performant Financial closed on Thursday at $8.82.