CERN - Cerner falls after UBS downgrade; limited room for multiple expansion cited

UBS Securities has downgraded Cerner Corporation (CERN) to neutral from buy arguing that the company has limited room to expand the trading multiple which remains above its historical average. Assuming a 23.0x NTM P/E multiple, the analyst Kevin Caliendo and the team have slashed Cerner’s 12-month price target to $83 from $84 per share implying only ~5.1% upside to the previous close. The company is trading lower with ~2.6% loss in the pre-market.Per Q4 2020 earnings release, the company’s 2021 guidance for revenue came ahead of expectations thanks to the Kantar acquisition, the analysts note, arguing that EPS forecast fell below Street forecasts despite ‘greater than expected share repurchases.’However, the firm predicts pressure on core growth to persist with a ‘limited upside to revenue growth or NT catalysts’ to expand the multiple which, despite being at a discount to S&P, continues to trade above its historical average.In January, Cerner faced a double downgrade from the

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Cerner falls after UBS downgrade; limited room for multiple expansion cited