After Some Reflection, Baird Comfortable With Premier's Q4 Results
Baird maintained its Outperform rating on Premier Inc (NASDAQ: PINC). The brokerage established a fresh price objective of $39.
The comments came after the company delivered an earnings miss in the fourth quarter due to higher operating costs after reporting better than estimated EPS in the preceding three quarters. Baird is comfortable with the results following clarification that it was a one-time severance cost, which was not expected.
The positive factors are that Premier exceeded revenue and gross margin estimates for the fourth quarter. Referring to the outlook, the brokerage thinks that it looked to be a conservative one since the forecast is 1–2 percent below the Street analysts' expectations.
In a note, Baird analysts said, "We think Supply Chain Services – both Admin Fees and organic Product revenue – met or exceeded expectations (Acro is slightly smaller than expected, perhaps on timing/conservatism and Hep C influence), while the smaller, lower-margin Performance Services segment was modestly behind expectations."
The brokerage believes there is no need to create a big noise on the mid-point forecast of 1–2 percent below predictions. The lead analysts predicted the company's shares to give up anything between $1 and $2. "Anything more and we're buyers' now."
At time of writing this, shares traded down $2.40, or 7.11 percent, to $31.34 on Tuesday.
Latest Ratings for PINC
Aug 2016 | Baird | Maintains | Outperform | |
Aug 2016 | Barclays | Maintains | Overweight | |
Aug 2016 | Citigroup | Maintains | Buy |
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