Analyst Brian Tanquilut at Jefferies & Co. sees many bright days ahead for Acadia Healthcare investors. Following the company's second-quarter earnings report, he has raised his price target for the stock to $100 from $88. That leaves a lot of upside: Acadia (Ticker: ACHC) closed last week's trading at $81.02 and is to $81.84 this afternoon.
Jefferies analyst Edward Plank has reiterated his 'hold' rating on shares of Genesco after the retailer's first-quarter earnings report. But Plank also his trimmed his price target for the Nashville-based seller of shoes and hats to $67 from $69. Genesco (Ticker: GCO) closed Monday's session at $65.27 and is down 15 percent so far this year.
This post has been updated to correct the info on Deutsche's call
Several investment firms tracking Acadia Healthcare on Thursday updated their models for the Franklin-based operator of behavioral health facilities after its Q1 report, which included word of three acquisitions in the United Kingdom. Analysts at Jefferies have hiked their price target to $88 from $76 while their peers at Cantor Fitzgerald now see Acadia climbing to $84 instead of $70. And Wells Fargo researchers have upgraded the stock to 'outperform' from 'market perform.'
Not everyone is quite that upbeat, though: At Deutsche Securities, veteran analyst Darren Lehrich has reiterated his 'buy' rating, saying he expects more acquisitions this year. But he has raised his target to "only" $77 from $72.
Investors appear to be paying more attention to Lehrich's move than to the more positive takes. At about 1:15 p.m., Acadia shares (Ticker: ACHC) were down slightly to $68.61 on volume that already had topped the daily average. So far this year, they've risen about 12 percent.
Analysts at Jeffries Group have begun coverage on Nashville-based AmSurg. Starting last week, the firm gave the ambulatory surgery company a 'buy' rating and a price target of $65. Shares of AmSurg (Ticker: AMSG) closed down about 2 percent at $55.34 Monday. In the last six months, they're up 12 percent.
Jefferies analyst Daniel Binder isn't buying the idea that Dollar General might be forced to sell off 4,000 stores should it succeed in buying Family Dollar. Yes, it's possible the Federal Trade Commission is driving at a hard bargain, Binder said in a Wednesday note to clients, but he expects the divestiture requirement will be around 2,200 instead of the much larger number sources passed on to the New York Post earlier this week.
"Even if we removed Walmart from our own market analysis, we get to about 2,900 stores that the FTC could take issue with," Binder wrote, adding that it "seems like more than a coincidence" that the New York report came hours before Family Dollar and Dollar Tree said they were pushing back the date of their merger vote.
Investors appear to have largely digested — if not altogether dismissed — the 4,000-store report. At about 1:40 p.m. Thursday, shares of Dollar General (Ticker: DG) were up about 1 percent on the day — and up about the same from their Tuesday close — and changing hands at $66.72.
Cowen & Co. analyst Sam Margolin has turned more bullish on Delek US Holdings, hiking his rating to 'outperform' from 'market perform' and lifting his price target to $43 from $32. Among his reasons for optimism are better numbers from Delek's Arkansas and Texas refineries as well as greater contributions from its Delek Logistics affiliate and a stronger cash position. Delek shares (Ticker: DK) are up 3 percent to about $33.60 today and have climbed 17 percent in the past five sessions.
At Stifel Nicolaus, analyst Dan Bernstein has reiterated his buy on shares of Brookdale Senior Living and hiked his price target to $40 from $38. Brookdale shares (Ticker: BKD) are changing hands around $33.35.
Edward Plank at Jefferies & Co. has begun covering shares of shoe and hat retailer Genesco with a 'hold' rating and little expectation that the company's shares (Ticker: GCO) will go anywhere in the next couple of quarters. Plank's price target for Nashville-based Genesco is $82, barely a buck above where the shares have traded over the past few days.
Jefferies & Co. analyst Brian Tanquilut sees bigger things coming from HCA Holdings' positive earnings preview this week. He thinks that "HCA's strong cash flows open up opportunities for stock-enhancing capital deployment" such as acquisitions or share buybacks. (The company late last year spent $500 million to repurchase some of its stock.) Tanquilut also lifted his price target for HCA to $72 from $70.
Whether you think Dollar General will buy Family Dollar depends on how many more stores you think they can build
The biggest early Wall Street proponent of Dollar General buying out a Family Dollar, now 9 percent-owned by Carl Icahn, is Jefferies analyst Daniel Binder, who on Monday raised his ratings for both discount retailers to 'buy' from 'hold' and said a joining of their forces would do much to slow the pace of new store growth.
Calling Dollar General "a motivated buyer given where we are in the lifecycle of this dollar store industry," Binder has cranked up his price target on the Goodlettsville-based company to $75 from the $56 at which he initiated coverage two months ago.
"Simply put, the industry has matured, there are clear performance gaps between the number one and two players, we think the pace of capacity increases are out of balance, new competition is coming and we see potential for large synergies," Binder wrote.
But there is little consensus that the industry actually has matured to the extent Binder contends. Dollar General Chairman, President and CEO Richard Dreiling last fall said the company's real estate models now project the opportunity to build another 14,000 stores, up from the previous estimate of 10,000. The company will this year open 700 new locations and this morning said additions in Maine, Rhode Island and Oregon will give it a footprint across 43 states by early next year.
Also countering Binder's thoughts on store growth is John Heinbockel at Guggenheim Securities, who says Family Dollar's story should be one of an organic turnaround and sees the industry six to seven years away from maturity. On top of that, he lists the big nuts-and-bolts challenges — IT platforms, supply chains and corporate cultures among them — that would come with a big deal and says it just wouldn't be worth it for Dreiling and company.
"These risks are usually worth taking after a sector has gone ex-growth and compelling, low-risk organic expansion is no longer an option," Heinbockel wrote in a note Monday. "That is not the case with respect to the dollar store sector today. It has not gone ex-growth — to the contrary; we are still many years away from saturation."
Over at Sterne Agee, Chuck Grom is relying on the word of Dreiling's team, which he says has "gone out of its way to suggest" that a Family Dollar deal isn't in the cards. A going-private transaction is the most likely avenue out of Family Dollar's Icahn situation, Grom said.
Heading into the last hour of trading Monday, shares of Dollar General (Ticker: DG) were up about 8 percent while those of Family Dollar had gained 14 percent from Friday's close.
Mark Montagna at Avondale Partners isn't convinced Genesco's results will improve markedly during the second half of the company's fiscal 2015 and beyond. Several fashion trends — or the clear lack thereof — are working against the shoe and hat retailer, he says, and the rollout of its lower-margin Locker Room chain will hurt profits. But he expects the company will keep its premium valuation, which now is about 14 times earnings, and has hiked his price target to $77 from $70. That leaves about 5 percent of upside for Genesco (Ticker: GCO), which is up slightly year to date.
Jefferies analyst Brian Tanquilut has begun covering shares of Brookdale Senior Living with a 'buy' rating and a price target of $40, which is more than 20 percent above where the stock (Ticker: BKD) now trades. Tanquilut likes the growth prospects of senior housing in general and says the planned acquisition of Emeritus "will yield better-than-expected synergies and incremental equity value as the combined entity puts up healthy growth and exerts its market power."
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