Analysts at Cowen highlighted four reasons why investors should consider buying Allscripts Healthcare Solutions Inc
(NASDAQ: MDRX). The firm's Charles Rhyee upgraded Allscripts' stock rating from Market Perform to Outperform with a price target raised
from $13 to $16.
1. Improving Fundamentals
Allscripts has developed a reputation over the past few quarters of reporting consistent results that at least matched
expectations if not came in higher than expected, Rhyee commented in his upgrade note. This has resulted in a reduction in
volatility earnings as the company shifted its business more towards a recurring revenue model.
2. EIS Acquisition
Allscripts' acquisition of
McKesson Corporation (NYSE: MCK)'s Enterprise
Information Solutions Business will prove to be complementary to its current offerings and add incremental revenue along with cost
synergies to fuel growth.
3. Free Cash Flow
The healthcare company boasts a "strong" 9.3-percent free cash flow
yield which is superior to the group average of 4.4 percent, the analyst also noted. This could result in incremental earnings from
a share buyback program, debt repayment or further M&A deals. In fact, one year's worth of free cash flow alone could be up to
10 percent accretive to the company's adjusted EPS.
4. Attractive Multiple
Finally, the analyst's $16 price target implies the stock will trade at 20.9x on expected 2018 EPS of $0.76 as opposed to the
current multiple of 16.3x and the group's average multiple of 27.5x.
At last check, shares of Allscripts were up 5.21 percent at $13.73.
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Benzinga's
Top Upgrades, Downgrades For September 11, 2017
Latest Ratings for MCK
Date |
Firm |
Action |
From |
To |
Jul 2017 |
Jefferies |
Upgrades |
Hold |
Buy |
May 2017 |
JP Morgan |
Upgrades |
Neutral |
Overweight |
May 2017 |
Jefferies |
Initiates Coverage On |
|
Hold |
View More Analyst Ratings for
MCK
View the Latest Analyst Ratings
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