Market Overview

Deutsche Bank Analyst: Cerner's Contract Loss Won't Hurt


Cerner Corporation (NASDAQ: CERN) lost a major potential contract to its competitor Tuesday but an analyst said the company "should win its fair share" in the future.

Deutsche Bank's George Hill said the deal is worth "hundreds of millions of dollars" and called it among the largest opportunities of the year in the sector.

In a two-horse race with privately held Epic Systems Corp., Cerner lost a multi-year contract for medical records software with the Mayo Clinic.

But Hill maintained a Buy rating and $70 target on Cerner, saying it's "well-positioned" to win a large contract with the Department of Defense later this year, and is also poised to pick up additional domestic business.

Cerner currently has Mayo as a client at two hospitals, and won't be displaced there by the Epic contract for at least three years, according to Hill.

Hill called the contract loss "disappointing" but said it doesn't affect to his estimated 2015 earnings growth rate of more than 20 percent.

Shares or Cerner recently traded at $64.90, down 1 percent.

Latest Ratings for CERN

Jul 2019MaintainsOverweight
May 2019MaintainsBuy
May 2019MaintainsBuy

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Posted-In: Deutsche Bank George HillAnalyst Color Contracts Reiteration Analyst Ratings


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