Kindred Healthcare Has Near-Term Headwinds According To Avondale; Price Target Cut
Avondale Partners has cut the price target of Kindred Healthcare, Inc. (NYSE: KND) to $14 from $17 citing near-term headwinds in the hospital division (HD).
"We continue to believe that 2H headwinds from criteria in the HD as well as skepticism surrounding cash flow generation may continue to pressure KND's ability to warrant an expanded multiple," analyst Paula Torch wrote in a note.
The analyst noted that the stock is down about 23 percent since the first-quarter earnings report at the beginning of May, partly due to cash flow expectations and reconciling adjustments as well as risks surrounding the second half performance in HD due to criteria.
"Earnings in 2016 are geared to 1H and embarking on a softer 2H could also be weighing on shares," Torch highlighted.
However, the analyst raised her full-year EPS view to $0.90 from $0.88 due to the first quarter beat and solid second-quarter guidance. The analyst also raised her 2017 EPS estimate by $0.01 to $0.94.
Torch, who maintained her Market Perform rating on the stock, said the company's range of care and diverse level of post-acute services should serve the company in the long term.
Shares of Kindred Healthcare closed Thursday's regular trading session 1.06 percent lower at $11.17, but were up 3.45 percent to $11.55 within the first hour of trading Friday.
Latest Ratings for KND
|Nov 2016||RBC Capital||Downgrades||Outperform||Sector Perform|
|Nov 2016||Stifel Nicolaus||Downgrades||Hold||Sell|
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