Barclays Bullish On Cotiviti Shares

Barclays analyst Eric Percher issued a new rating on shares of Cotiviti Holdings Inc COTV Monday morning. The new recommendation followed the expiration of the sell-side quiet period which came on the heels of Cotiviti's initial public offering. Percher set a new Overweight rating and $22 price target on shares of Cotiviti. "It pays to be precise," the Barclays analyst titled his research note. "Macro tailwinds will sustain demand for payment accuracy solutions. According to the CMS, national healthcare expenditures are forecast to grow at a 6% CAGR for the next three years. Despite efforts to lower the level of inaccurate payments, error rates remain stable," according to Percher. The analyst said he likes the company's model which benefits from "high predictability and scalability. Revenues are generated only when client savings are achieved. Once embedded within a payor, COTV's tools are essential to holding down costs/maintaining profits (client retention since 2013 is 100%). Moreover, COTV's technology and reimbursement expertise represents a unique competitive advantage that would be difficult to replicate," Percher said. As shares of Cotiviti last traded at $19.28, up about 1.3 percent from Friday's closing price, Percher's new price target on the stock suggested possible upside of about 14 percent.