Bank of America Merrill Lynch Reiterates Buy On Vanguard Health Systems

Bank of America Merrill Lynch is out with a research report on Vanguard Health Systems Inc

and is reiterating its Buy rating and $20 price target on shares. In a note to clients, Bank of America Merrill Lynch writes, "VHS reported a solid quarter with Acute Care results largely in line and Health Plan results better than expected. Importantly, VHS noted acuity was in line and it feels good about the progress it is making in Detroit, the key to the VHS story. With the quarter we are maintaining our estimates (as we continue to assume that health plan results return to normalized margins) but are lowering our PO to $20 from $22 to reflect increased economic uncertainty and the declining group multiple generally. Nevertheless, we reiterate our Buy rating as we continue to believe that VHS's above avg. organic growth will be aided by upside from deals, with the Detroit deal adding meaningfully to long-term growth." Shares of VHS lost 50 cents yesterday to close at $14.34.