UPDATE: Jefferies Initiates Coverage on Healthcare Services Group on Great Fundamentals, Full Valuation

In a report published Friday, Jefferies analyst Sean Dodge initiated coverage on Healthcare Services Group HCSG with a Hold rating and $25.00 price target. In the report, Jefferies noted, “Demand for HCSG's services will grow as post-acute facilities search for ways to cope with an increasingly challenging reimbursement environment. Outsourcing penetration is only 18% in the SNF space, so lots of runway left. We expect 11-14% revenue growth for next few years. Operating leverage likely benefits margin. Dividend growth is poised to reaccelerate. Fundamentals look great, but at 28x 2014 EPS, we believe further multiple expansion is limited.” Healthcare Services Group closed on Thursday at $26.09.