Market Overview

Envision Q4 Outlook Disappoints, But All Hope Is Not Lost

Share:
Envision Q4 Outlook Disappoints, But All Hope Is Not Lost

Investors tend to lose confidence in a company's outlook after a stock plunges 30 percent in one day, but that shouldn't be the case when it comes to Envision Healthcare Corporation (NYSE: EVHC), at least according to analysts at Canaccord Genuity.

The firm's Richard Close maintains a Buy rating on Envision Healthcare's stock with an unchanged $68 price target (under review) despite a poor third-quarter earnings report and disappointing fourth-quarter guidance.

Envision Healthcare's third-quarter miss was "expected" due to the negative impact of Hurricanes Harvey and Irma but the fourth-quarter guidance was "alarming," the analyst wrote. The company's fourth-quarter EBITDA guidance implies ongoing deterioration in ER volumes, flat anesthesia rates and a higher than expected new contract start-up expense. Accordingly, if the EBITDA guidance becomes the "appropriate starting point" heading into 2018 then at that point it would be "challenging" to continue recommending owning the stock.

tipranks.png

But in the meantime, Envision Healthcare remains the market leader and should be able to "maneuver" through the challenging environment and generate shareholder returns over the longer term, Close also wrote. Nevertheless, further declines in the stock in the near term would be justified if investors left Wednesday morning's conference call unsatisfied.

Finally, investors should be encouraged that the company's management team understands the urgency of reviewing any and every strategic alternative but no specific details are expected to be announced soon.

Related Links:

Envision Healthcare Fundamentals Are 'Questionable,' Expect A Sell-Off

Mid-Morning Market Update: Markets Open Higher; Estee Lauder Tops Q3 Expectations

Latest Ratings for EVHC

DateFirmActionFromTo
Jun 2018Canaccord GenuityDowngradesBuyHold
Jun 2018Canaccord GenuityDowngradesBuyHold
Jun 2018Raymond JamesDowngradesStrong BuyMarket Perform

View More Analyst Ratings for EVHC
View the Latest Analyst Ratings

 

Related Articles (EVHC)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings Long Ideas News Guidance Health Care Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
AAPLRaymond JamesMaintains120.0
BLFSOppenheimerDowngrades
CTMXGuggenheimDowngrades
EIDXGuggenheimDowngrades
ILMNUBSDowngrades285.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com