UPDATE: Stifel Reiterates on HealthSouth Following Management Meetings

In a report published Friday, Stifel analyst Robert Mains reiterated a Buy rating on

, and raised the price target from $38.00 to $39.00. In the report, Stifel noted, “We hosted meetings with HealthSouth management yesterday. With its improved operations, balance sheet, and portfolio of assets, investors may wonder about prospects for future growth. Management made a strong case for continued internal and improving external growth opportunities, coupled with an operating model positioned to take share within the evolving healthcare delivery system. Although the Affordable Care Act has limited impact on Medicare-dependent post-acute providers such as HealthSouth, the company is exposed to changes to the healthcare delivery system emphasizing continuity and quality of care coupled with cost and efficiency pressures. Management explained how, just as it has generated higher quality at a lower price for acute rehabilitation services, it is similarly positioned to compete for other patients under a system that focuses more on outcomes of care rather than site of care. The company also explained that while reimbursement pressures are inevitable, it has presented lawmakers with alternatives that would reward efficiency rather than just whack payments.” HealthSouth closed on Thursday at $34.41.