BMO Capital Markets analyst Jeffrey M. Silber downgraded Bright Horizons Family Solutions Inc BFAM to Market Perform from Outperform with a price target of $99.
The analyst believes that the consensus estimates, especially for 2024, 'may be too high' as the company still faces government funding roll-off headwinds in the majority of the coming year.
Although Silber expects BFAM to recover from the pandemic trough, he believes the stock may have 'gotten a bit ahead of itself.'
The analyst expects full-service center utilization to improve but still be below pre-pandemic levels (+70%), with management expecting to reach the 60% threshold by year-end.
Silber estimates adjusted EPS of $2.68 in 2023 vs. consensus of $2.83 and BFAM's guidance of $2.80-$3.00.
The analyst expects 2024 EPS of $3.04 (vs. consensus of $3.63), with an expected margin expansion of 120bps which maybe unachievable without meaningful FSC utilization improvement.
Price Action: BFAM shares are trading lower by 3.13% at $92.75 on the last check Monday.
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