Lincare reaches annual high on recommendation

Analyst puts Lincare on 'Top Picks' list, expecting Medicare reimbursement won't be reduced

• On 11:46 am EDT, Tuesday September 22, 2009

NEW YORK (AP) -- Shares of Lincare Holdings Inc., which provides home delivery of oxygen and other respiratory therapies, rose to an annual high Tuesday after a Citi Investment Research analyst placed the stock on a recommended list.

Based on proposed health care reform bills, Medicare reimbursement rates for oxygen therapy companies Lincare will not be cut next year or in the coming years, said analyst Gary Taylor. That will lead to stronger profit growth and provide a boost to Lincare shares.

Taylor put the stock on the "Top Picks Live" list, a group of stocks carrying a strong recommendation. He raised his price target on Lincare shares to $45 from $31 and maintained a "Buy" rating. Lincare stock last traded at $45 in May 2005.

In midday trading, shares of the Clearwater, Fla., company rose $2.09, or 6.6 percent, to $33.72. They peaked at $33.98.

Taylor also raised his profit estimates for Lincare, forecasting net income of $2 per share in 2009 and $2.49 per share in 2010, up from $1.94 and $2.32 per share. On average, analysts expect $1.94 per share this year and $2.29 per share next year, according to Thomson Reuters.

He added that Lincare's expected revenue growth of 10 to 12 percent per year is about twice the average for health care facility operators.