VCRA - Baird boosts some models in health services/tech after generally strong Q3

In an earnings wrap on healthcare services and technology, Baird takes the opportunity to update some models and tease out key themes emerging from the numbers. Fundamentals look strongest in the Home Health and Behavioral area, Baird says - especially for Acadia Healthcare (ACHC), where it's boosting EPS estimates and its price target. Its Q3 earnings were "meaningfully better" than consensus, with same-store revenue growth "driving 24% underlying upside to EBITDA." Volume gains were likely due to the Acute service line, pointing to a diverse referral network and solid marketing/messaging, it says. The firm is raising its estimate for 2020 EPS to $2.32 from $2.12, and for 2021 to $2.65 from $2.53. And it's taking its price target to $35 from $32. In Facilities, hospital EBITDAs got a boost from pricing (acuity/mix) and expense management, the firm says, noting that the improved volume trends from September have continued into October.

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Baird boosts some models in health services/tech after generally strong Q3